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Transcript of STATE OF CONNECTICUT · Web viewenergy companies such as Nippon Oil, Osaka Gas, Tokyo Gas and Tokyo...
PRELIMINARY REPORT
FUEL CELL ECONOMIC DEVELOPMENT PLANHYDROGEN ROADMAP
SUBMITTED TO:
Department of Economic & Community Development
January 1, 2007
BY:
The Connecticut Center for Advanced Technology, Inc.and
The Connecticut Hydrogen-Fuel Cell Coalition
Connecticut Center for Advanced Technology, Inc.111 Founders Plaza, Suite 1002
East Hartford, CT 06108(860) 291-8832
www.ccat.us
Preliminary Plan
Table of Contents
EXECUTIVE SUMMARY...............................................................................................6Preliminary Findings...............................................................................................................................6Forward.................................................................................................................................................10Market Summary..................................................................................................................................11
PART I Identification and Assessment of Market Conditions for Fuel Cell and Hydrogen Technology.................................................................................................16
Employment ................................................................................................................................ 17 Sales and R&D ............................................................................................................................ 18
Preliminary Market Assessment for Stationary Fuel Cells, Portable Fuel Cells, and Transportation..19Stationary Power Market for Fuel Cells ...................................................................................... 19 Portable Power Market for Fuel Cells ......................................................................................... 22 Transportation ............................................................................................................................. 24 Summary of Potential Global Markets ........................................................................................ 27
Other Market Drivers............................................................................................................................28Policy ........................................................................................................................................... 28 Energy Supply ............................................................................................................................. 30 Air Emissions .............................................................................................................................. 31
PART II Analysis of Connecticut’s Hydrogen and Fuel Cell Industry..................35Description of Fuel Cells and Hydrogen..............................................................................................35
Fuel Cells ..................................................................................................................................... 35 Hydrogen ..................................................................................................................................... 36
Fuel Cells..............................................................................................................................................37Connecticut Fuel Cell Companies ............................................................................................... 37 Core Competencies of Connecticut Fuel Cell Companies .......................................................... 40 Market Focus of Connecticut Fuel Cell Companies ................................................................... 40 Major Issues Facing Connecticut Fuel Cell OEM’s .................................................................... 41
Hydrogen...............................................................................................................................................42Connecticut Hydrogen Companies .............................................................................................. 42 Core Competencies of Connecticut Hydrogen Companies ......................................................... 44 Market Focus of Connecticut Hydrogen Companies .................................................................. 44 Major Issues Facing Connecticut Hydrogen Companies ............................................................ 45 Fuel Cell and Hydrogen R& D and Manufacturing Companies in Other States ........................ 45 Other States Where There Is Significant OEM or Major Supplier Activity in Fuel Cells and Hydrogen. .................................................................................................................................... 46 Fuel Cell and Hydrogen R&D and Manufacturing Companies in other Countries .................... 48 Connecticut Companies’ Positioning in Fuel Cells and Hydrogen ............................................. 49 Efforts in Support of Hydrogen and Fuel Cell Manufacturers .................................................... 52 Demonstration and Installation Activity ..................................................................................... 52 Planning and Partnerships ........................................................................................................... 54 Research Centers and Support ..................................................................................................... 54 State Assistance for Stationary Fuel Cells .................................................................................. 55 State Assistance for Hydrogen-Fueled Vehicles ......................................................................... 56
Hydrogen and Fuel Cells in Transportation..........................................................................................57Business Opportunity for Connecticut Companies ..................................................................... 59 Development of Legislation and Regulations Associated with the Use of Hydrogen ................ 61 Hydrogen Infrastructure in Connecticut ...................................................................................... 61 Competition from Other States ................................................................................................... 63
Research and Development...................................................................................................................64Connecticut Global Fuel Cell Center - Research Capabilities .................................................... 65
PART III Assessment of the Economic Potential for Connecticut..........................67Economic Impacts of Connecticut’s Hydrogen and Fuel Cell Industry ...................................... 67
PRELIMINARY CONCLUSION..................................................................................74
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Preliminary Plan
Appendix A: Tables.....................................................................................................76Appendix B: High Value Opportunities for Fuel Cell & Hydrogen Applications.85
Potential Fuel Cell Installations.............................................................................86Commercial Building Types with Potentially High Electricity Consumption ............................ 86 Education ..................................................................................................................................... 86 Food Sales ................................................................................................................................... 87 Food Service ................................................................................................................................ 88 Inpatient Healthcare .................................................................................................................... 88 Lodging ....................................................................................................................................... 89 Public Order and Safety .............................................................................................................. 89 Energy Intensive Industries ......................................................................................................... 91 Public Buildings: Municipal and State Government ................................................................... 92 Telecommunications Facilities with Potential for Onsite Generation ........................................ 92 Sewage Treatment Plants ............................................................................................................ 93
Potential Hydrogen Applications...........................................................................94Alternative Fuel Station Location ............................................................................................... 94 State Fuel Dispensing Stations .................................................................................................... 94
Appendix C: Comparison of Fuel Cell Technologies.............................................108Appendix D: Acronyms...............................................................................................109
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Preliminary Plan
Index of Tables
Table I.1 - Selected Transportation Market Statistics.................................................25Table I.2 – Summary of Mature Markets for Stationary and Portable Power, and Transportation.................................................................................................................28Table II.1 - Connecticut Fuel Cell Companies..............................................................37Table II.2 - Connecticut Hydrogen Companies............................................................42Table II.3 - Connecticut Companies’ Fuel Cell Position Compared to other States.50Table II.4 - Connecticut Companies’ Hydrogen Position Compared to other States...........................................................................................................................................51Table II.5 - Hydrogen Filling Stations and Stationary Fuel Cell Installations..........53Table III.1 - Employment for the Hydrogen and Fuel Cell Industry in Connecticut...........................................................................................................................................67Table III.2 - Economic Impacts of CT Hydrogen and Fuel Cell Industry,.................68Table IV.1 - Example Fuel Cell and Hydrogen Companies in Massachusetts...........76Table IV.2 - Example Fuel Cell and Hydrogen Companies in New York..................77Table IV.3.1 - Example Fuel Cell and Hydrogen Companies in Other States...........78Table IV.3.2 - Example Fuel Cell and Hydrogen Companies in Other States...........79Table IV.3.3 - Example Fuel Cell and Hydrogen Companies in Other States...........80Table IV.4 - Planning Documents and Partnerships for Key States...........................81Table IV.5 - Research Support for Hydrogen and Fuel Cells in Key States..............82Table IV.6 - State Assistance for Stationary Fuel Cells...............................................83Table IV.7 - State Assistance for Hydrogen Fueled Vehicles......................................84Appendix B Table V.1 – Summary of Energy Potential: Commercial Building Types with Potentially High Electricity Consumption.........................................................................91
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Preliminary Plan
Index of Figures
Figure I.1 – Global Market Focus for the Fuel Cell Industry............................................17Figure I.2 – Global Employment.......................................................................................18Figure I.3 – Global Sales and R&D Expenditures.............................................................18Figure I.4 - U.S. Greenhouse Gas Emissions by End-Use Economic Sector, 1990–200333Figure II.1 – U. S. DOE Hydrogen Technology Budget Request Program Areas (FY05)65Figure III.1 – Example: GenCell Fuel Cell Cost vs. Production Volume........................72Appendix B - Figure 1: Energy Intensive Industries.........................................................95Appendix B - Figure 2: Food Service................................................................................96Appendix B - Figure 3: Food Sales...................................................................................97Appendix B - Figure 4: Inpatient Healthcare....................................................................98Appendix B - Figure 5: State Public Order and Safety.....................................................99Appendix B - Figure 6: Lodging.....................................................................................100Appendix B - Figure 7: Education...................................................................................101Appendix B - Figure 8: Sewage Treatment Plant............................................................102Appendix B - Figure 9: Town & City Halls, and Selected State Buildings....................103Appendix B - Figure 10: Telecommunications Sites.......................................................104Appendix B - Figure 11: Alternative Fuel Station Locations..........................................105Appendix B - Figure 12: State Fuel Dispensing Locations.............................................106
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Preliminary Plan
EXECUTIVE SUMMARY
Preliminary Findings
Preamble
In accordance with Section 64 of Public Act 06-187, the Connecticut Center for
Advanced Technology, Inc. (CCAT) is pleased to submit to the Connecticut Department
of Economic and Community Development (“DECD”), the following Preliminary Plan
for fuel cell economic development in Connecticut. This Preliminary Plan has been
developed to: (1) identify and assess market conditions for fuel cell and hydrogen
technology; (2) analyze Connecticut’s hydrogen and fuel cell industry; and (3) assess the
economic potential for Connecticut, including the economic impact of Connecticut’s
hydrogen and fuel cell industry.
The following preliminary findings will be validated and refined within the Final Plan,
which will be submitted by DECD to the Connecticut General Assembly on or before
January 1, 2008:
Market Profile
1) The emerging markets for fuel cells and hydrogen technology include: stationary
power/distributed generation, portable power for handheld electronics, and
transportation.
2) Worldwide government spending for fuel cell and hydrogen infrastructure
approached $1.5 billion in 2004.
3) In 2005, the global sales of fuel cells generated approximately $400 million in
revenue.
4) Preliminary studies suggest that the total global fuel cell/hydrogen market is
expected to generate as much as $18.6 billion annually in revenue over the next
decade. This would require an employment base of approximately 120,000. If the
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Preliminary Plan
fuel cell/hydrogen industry captures a significant share of the transportation market,
projected sales could generate $35 billion annually in revenue over the next decade.
This would require an employment base of approximately 230,000.
Connecticut’s Position in the Fuel Cell Industry
1) Connecticut has been the leader and innovator of fuel cell technology and
electrochemical technologies, since the 1950s, and pioneered its application for
spacecraft, submarines, stationary power, and transportation.
2) Connecticut manufacturers and researchers have developed expertise in (1) all fuel
cell technologies, including alkaline systems, proton exchange membrane (PEM),
phosphoric acid, molten carbonate and solid oxides; (2) alkaline and PEM
electrolysis technologies; and (3) applying these technologies to applicable markets.
3) Two of the major fuel cell developers and manufacturers in the world are located in
Connecticut - FuelCell Energy, Inc. in Danbury and Torrington, and UTC Power in
South Windsor. These companies dominate the fuel cell market for stationary
power/distributed generation for fuel cells greater than 200 kilowatts (kW).
4) Several Connecticut suppliers, educational institutions, research facilities (e.g.
Connecticut Global Fuel Cell Center), and the Connecticut Hydrogen-Fuel Cell
Coalition, including the Connecticut Clean Energy Fund, support Connecticut’s fuel
cell industry.
5) Connecticut’s fuel cell and hydrogen industry currently supports 927 direct jobs and
1,221 indirect jobs for a total of 2,148 jobs statewide. The fuel cell and hydrogen
industry supports approximately 7,000 globally.
6) Connecticut’s fuel cell and hydrogen industry generates approximately $29 million
annually in state tax revenue; approximately $2 million annually in local tax
revenue and over $340 million annually in gross state product.
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Preliminary Plan
Major Issues
1) Costs – increased production rates, and improved design and technology will be
necessary to reduce costs;
2) Performance – recognition of reliability and durability;
3) Infrastructure – hydrogen refueling stations will be required to support the fuel cell
transportation market;
4) Perception – utilization of hydrogen as a fuel has not been fully accepted in the
market place and may be perceived as high risk;
5) Environmental – the positive environmental benefits of fuel cells and hydrogen are
not fully considered;
6) Market – distribution channels are not fully developed for both fuel cell and
hydrogen production systems;
7) Support – favorable government structure including education, workforce
development, and policy needed to support market development; and
8) Threats – other states’ programs and foreign OEMs entering the market are
increasing.
As mandated by Public Act 06-187, Sec. 64, the Final Plan will identify strategies to (1)
facilitate the commercialization of hydrogen-based technologies and fuel cells; (2)
enhance energy reliability and security; (3) promote the improved efficiency and
environmental performance of transportation and electric generation with reduced
emissions, reduced greenhouse gases, more efficient use of nonrenewable fuels, and
increased use of renewable and sustainable fuels; (4) facilitate the installation of
infrastructure for hydrogen production, storage, transportation and fueling capability; (5)
disseminate information regarding the benefits of hydrogen-based technologies and fuel
cells; (6) develop strategies to retain and expand hydrogen and fuel cell industries in
Connecticut; (7) identify areas within the state transportation system that would benefit
from the integration of potential mass transit and fleet transit locations with hydrogen or
natural gas and hydrogen mixture refueling stations; and (8) identify areas in the electric
and natural gas distribution system of the state that would benefit from the development
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Preliminary Plan
of distributed generation through hydrogen or fuel cell technology as a reliability asset
necessary for voltage control, grid security, or system reliability, or for the provision of
required uninterruptible service at customer sites.1 The Final Plan will also evaluate what
the economic impact of a developed fuel cell and hydrogen industry will have on
Connecticut’s economy, and propose recommendations that will enhance Connecticut’s
position as a world leader in the fuel cell and hydrogen market.
CCAT will consult with the Connecticut Hydrogen-Fuel Cell Coalition, the Renewable
Energy Investment Fund, the Connecticut Department of Transportation, Connecticut’s
electric and gas service providers, and Connecticut’s hydrogen and fuel cell industrial
base to develop the strategies for the Final Plan.
1 Public Act 06-187, Sec. 64
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Preliminary Plan
Forward
As oil and other non-sustainable hydrocarbon energy resources become scarce, energy
prices will increase and reliability for supply will be reduced. With such dependency of
the U.S. economy on hydrocarbon energy resources, Americans will be severely affected
by shortages of oil and natural gas. Recently Federal Reserve Chairman Ben Bernanke
said, “The increase in energy prices is clearly making the economy worse off both in
terms of real activity and in terms of inflation. There is no question about it.”2
While the threat of such shortages is real and potentially significant, strategic planning to
guide consumers to alternative and more efficient energy resources in a timely manner
will extend the time of use for available resources and reduce the impact attributable to
shortages of hydrocarbon fuels. Further, the use of alternative energy and more energy
efficient generation technologies may be able to improve environmental performance,
reduce long-term costs, and create opportunities for economic development. Attractive
technologies being considered by the energy industry and supported by a number of
states are fuel cell and hydrogen generating systems.
As Connecticut is a world leader in the research, design, and manufacture of hydrogen
and fuel cell related technologies, the State is uniquely positioned to develop the fuel
cell/hydrogen market and facilitate a smooth transition from hydrocarbon fuels using
conventional combustion technology to the use of efficient electrochemical technology.
Such a transition will open markets for energy management in the industrial, commercial,
institutional, and residential sectors, and thereby, develop opportunities for a substantial
creation of high-paying jobs in Connecticut.
2 AP Jeannine Aversa 7-21-06
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Preliminary Plan
Market Summary
The three primary global markets for fuel cells and hydrogen technology are: (1)
stationary fuel cells, (2) portable fuel cells, and (3) fuel cell and hydrogen refueling
associated with transportation. These markets are global and Connecticut is well
positioned now and well positioned to expand its share for increased employment,
increased sales, and increased research and development (R&D). Under existing trends,
by the year 2010, Connecticut would be positioned to increase direct employment to over
1,635 jobs (a 12 percent, 716 job gain from 2005); sales would be over $63 million (a 6.6
percent, $17 million gain from 2005); and investment in R&D would be $174 million (an
11 percent, $71 million gain from 2005).
However, others estimate that hydrogen and fuel cell technology has the potential to be
the dominant technology for distributed generation, automotive and transit bus
transportation, and portable power as a replacement for batteries. Consequently, some
view the hydrogen fuel cell industry as ripe for expansion, and have estimated, to be
validated by the final report, that the global fuel cell/hydrogen market, when mature, is
expected to generate as much as $18.6 billion annually over the next decade. This would
require an employment base of approximately 120,000. If the fuel cell/hydrogen industry
captures a significant share of the transportation market, projected sales could generate
$35 billion annually in revenue over the next decade. This would require an employment
base of approximately 230,000.3 The challenge for Connecticut is to develop a strategic
plan that will enhance the development of the fuel cell/hydrogen market, counter the
market obstacles which are impeding it, and to ensure that Connecticut maintains and
increases its position as a world leader in the industry.
This preliminary assessment of the potential for growth in the fuel cell and hydrogen
market is encouraging but suggests that the market drivers have not yet been sufficiently
addressed for these technologies to fully replace the use of conventional base
technologies. The barriers that are inhibiting market penetration include: high costs,
3 Source: Connecticut Department of Economic and Community Development
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Preliminary Plan
unappreciated environmental values, cost consuming interconnections, complicated codes
and standards, lack of adequate public awareness, investment needed to undertake
advanced research and development, lack of continuous (large scale) automated
production, and strong competition from rate-base supported grid generation load. The
most significant barrier is cost, including life-cycle costs that raise the following critical
issues as to the technologies’ market acceptability:
Is there a global market sufficient to justify investment by Connecticut?
Yes. With a 13 percent share of a global market that includes $353 million in annual sales
and $796 million in annual R&D investment, Connecticut now occupies a favorable
position to maintain and expand this share for increased employment and gross state
product. However, some estimate that the market will grow substantially, and revenues
are expected to generate between $18.6 billion and nearly $35 billion annually over the
next decade as hydrogen and fuel cell technology takes a larger share of the stationary
power, portable power, and transportation markets. With a potential market of this size,
Connecticut would be in an enviable position for substantial opportunities to increase
employment, sales, revenue, and investment in R&D.
Can Connecticut companies capture a larger share of the global market?
While the question of how to increase Connecticut’s share of the global sales, R&D and
employment market will be the focus of the Final Report, there are no technical barriers
that would preclude Connecticut companies from increasing their share of the global
market. The fuel cell and hydrogen industry will need to grow within the same business
climate that all industries face in Connecticut. Moreover, if Connecticut does not actively
and aggressively seek to increase its share, it may face loss of sales, R&D expenditures
and employment as other states and countries compete for fuel cell and hydrogen
development activities.
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Preliminary Plan
Can costs drop to a level that will provide for effective competition and increased
market penetration?
Yes. It has been estimated that with increased support for research and development, and
if production were to increase, production costs could drop to levels closer to parity with
conventional generation.
Will costs decrease if production were to increase?
Yes. It has been estimated that increased production could provide continuous
manufacturing of fuel cells that will help to support research, testing, and deployment of
hydrogen and fuel cell technology and achieve lower unit costs to effectively compete
with traditional generation technologies.
Will supportive measures to be applied to increase market penetration be economically
justified to earn a favorable return on public investment?
Yes. With appropriate support, to be determined by the Final Report, production could
increase, unit costs will drop, and employment will increase. With favorable multipliers
of 2.31 for employment, 1.84 for industrial revenues, and 1.72 for employee
compensation, Connecticut is well positioned to invest in the hydrogen fuel cell industry
with the potential for substantial indirect and induced effects.
Are there favorable locations for deployment and investment in Connecticut for
hydrogen and fuel cell technology?
Yes. Connecticut would benefit substantially through R&D investment and deployment
of hydrogen and fuel cell technology. Benefits would include advanced training and
education for long-term support of industry needs; improved environmental performance
and cleaner air in the state; improved reliability for the electric grid; and reduced costs for
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Preliminary Plan
electric consumers. All of these values will help to create new jobs that are directly and
indirectly associated with hydrogen and fuel cell technology.
In summary, data in this preliminary report suggests that there are favorable market
conditions for the expansion of the hydrogen fuel cell industry in Connecticut, that public
investment is appropriate and justified, that certain investment in hydrogen and fuel cell
technology could provide a favorable rate of return for investors, and that there are
favorable sites for deployment of hydrogen and fuel cell technology in Connecticut with
potential to meet energy needs, improve environmental performance, and increase
economic development and the creation of jobs.
This preliminary analysis was undertaken by CCAT with assistance from:
fuel cell and hydrogen equipment manufacturers, including FuelCell Energy, Inc.,
GenCell Corporation, Infinity Fuel Cell and Hydrogen, Inc., UTC Power, and
Distributed Energy Systems Corp.;
University of Hartford, Quinnipiac University, and the University of Connecticut
Global Fuel Cell Center;
government agencies including the Connecticut Siting Council, Connecticut
Clean Energy Fund, and the Connecticut Department of Economic and
Community Development; and
other members of the Connecticut Hydrogen – Fuel Cell Coalition, including
Bradley, Foster & Sargent, Inc., GrowJobs CT, International Association of
Machinists & Aerospace Workers, Millennium Cell Inc., and Updike, Kelly &
Spellacy, P.C.
The detailed assessment and strategies of this plan will be presented in “The State of
Connecticut Fuel Cell Economic Development Plan and Hydrogen Roadmap” and will be
finalized on January 1, 2008, per Public Act 06-187.
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Preliminary Plan
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Preliminary Plan
PART I Identification and Assessment of Market Conditions
for Fuel Cell and Hydrogen Technology
Fuel cells are energy conversion devices that can provide distributed power, heat, and
water from renewable fuels with the greatest efficiency and lowest environmental
emissions yet achieved.4 With a broad range of potential applications, fuel cell
technology is a prime example of a transformative technology. Worldwide government
spending for fuel cell and hydrogen infrastructure approached $1.5 billion in 2004.5,6 As
the world’s largest energy consumer, the United States has a particularly compelling need
for this technology. The consensus of economists seems to be that we will reach “a
watershed moment” in our use of energy “in our lifetime.”7
Global Market Analysis
From a global prospective, fuel cell technology has been recognized as an asset to
improve environmental performance and reduce use of non-renewable natural resources.
The global market focus is relatively diverse, but favors stationary power applications
with 40 percent of the market involved in such applications (small stationary applications
of 50 kW or less at 24 percent, and large stationary applications greater than 50 kW at 16
percent). Other markets include portable power generation at 18 percent, and
transportation at 42 percent, including vehicle drive (17 percent), fueling infrastructure
(14 percent), and auxiliary power units for vehicles (11 percent).8
4 For more detailed information regarding fuel cells and hydrogen, see Part III.5 Fuel Cell Industry Report, May 2005, P. 126 World Fuel Cells Study, Freedonia Group, Cleveland, OH, July 20037 The End of Cheap Oil, National Geographic, 205, 6, 2004, 808 US Fuel Cell Council; 2006 Worldwide Fuel Cell Industry Survey
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Preliminary Plan
Figure I.1 – Global Market Focus for the Fuel Cell Industry
Connecticut is dominant in the large stationary power fuel cell market (> 50 KW), and is
well positioned to expand its share in other markets for increased employment, increased
sales, and increased R&D.
Employment
According to the 2006 Worldwide Fuel Cell Industry Survey (Survey), global
employment in 2005 for the fuel cell industry was 7,074. The Survey does not identify
the global employment in each market sector. However, if one assumes a direct
correlation between market share and employment, the stationary, portable, and
transportation market sectors have a potential employment of 2,830, 1,273, and 2,971,
respectively.9
9 US Fuel Cell Council; 2006 Worldwide Fuel Cell Industry Survey
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Preliminary Plan
Figure I.2 – Global Employment
In early 2006, Connecticut’s actual employment involved in the hydrogen and fuel cell
industry was 927, establishing an approximate 13 percent share of global employment.
By the year 2010, Connecticut could be positioned to increase employment (based on a
12 percent compounded annual increase from 2005) to over 1,635 jobs, an increase of
716 jobs.
Sales and R&D
In 2005, global sales were approximately $353 million (a 6.6 percent increase from
2004). The majority of these sales were in the U.S. (48 percent), Japan (14 percent), and
Germany (12 percent). In 2005, R&D expenditures were $796 million (an 11 percent
increase from 2004). The majority of these expenditures were in the U.S. (58 percent),
Canada (20 percent), Germany (8 percent), and Japan (7 percent).10
Figure I.3 – Global Sales and R&D Expenditures
10 US Fuel Cell Council; 2006 Worldwide Fuel Cell Industry Survey
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If global sales continue to increase at a rate of about 6.6 percent and Connecticut
maintained its relative position, Connecticut could realize over $63 million in sales by
2010. Similarly, if global R&D continues to increase at a rate of approximately 11
percent and Connecticut maintained its relative position, Connecticut could realize $174
million in R&D expenditures by 2010.11
Preliminary Market Assessment for Stationary Fuel Cells, Portable Fuel Cells, and Transportation
The three primary global markets for fuel cells and hydrogen technology are: stationary
power/distributed generation, portable power, and transportation.
Stationary Power Market for Fuel Cells
According to the Energy Information Administration (EIA) (1), world electric
consumption will more than double from 14,780 billion kW in 2003 to 30,116 billion kW
in 2030. Most of the growth in demand of electricity is expected to occur in countries
outside the Organization for Economic Cooperation and Development (non-OECD)
countries where electricity usage will grow at 3.9 percent per year as compared to 1.5
percent in OECD countries.12 All primary energy sources are expected to grow
worldwide. Coal and natural gas remain the most important fuels for electricity
generation. The U.S., Europe and Japan represent the roughly one third of the world
population that has adequate supplies of electricity. It has been estimated that a third of
the world population has no electricity and that the other third of the world has
inadequate electricity supply ranging from only intermittent supply to supply with
frequent interruptions.
11 Based on a 6.6 percent compounded annual increase for sales, and an 11 percent compounded annual increase for R&D expenditures.12 International Energy Outlook 2006, Energy Information Administration, Report # DOE/EIA-0484 (2006)
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While most of the capacity additions come from centralized power plants, the share of
distributed generation in the overall mix is also increasing. In a 2006 survey conducted
by World Alliance for Decentralized Energy (WADE), the share of decentralized power
generation in the world market has increased to 7.2 percent by 2004, up from 7 percent in
2002.13 There are strong indications that a transition from a central power model to a
‘hybrid’ model that includes central as well as distributed generation is underway, though
slowly. This 2006 survey also notes that there was a surge in distribution generation
development during 2005, with its share in new power generation addition at around 25
percent, up from 13 percent four years ago.
While there are several market drivers, the main driver appears to be a growing
realization that fuel prices are going to remain high thereby necessitating more efficient
solutions to meeting the ever growing demand for electricity. Other possible benefits of
distributed generation besides direct electricity price reduction and stability, include
improved electricity reliability and quality, emission reductions, and a simple feeling of
control and/or independence. There is now an increasing awareness on the part of
consumers and policymakers that distributed generation presents a viable alternative to
expensive transmission and distribution (T&D) upgrades or new systems.
In developing countries the grid is often either unreliable or non-existent and those
governments do not have the resources to address the situation. As a result, a large
number of countries have mandates, initiatives or incentives to promote distributed
generation. Although it will take some time to take effect, the future of distributed
generation worldwide is quite promising.
13 World Survey of Decentralized Energy 2006, World Alliance of Decentralized Energy, May 2006; WADE is an organization that has more than 200 members worldwide. The members include distribution generation organizations, providers, governments, etc. The survey quoted here consists of direct inputs from WADE members.
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The U.S. and the rest of the developed world have well developed generation and T&D
infrastructure and has adequate electricity supply. The impetus for distributed generation
comes from:
• a need for extremely reliable power for critical commercial, industrial,
communication and health care facilities;
• opportunities to conserve resources and reduce emissions through distributed
generation in combined heat and power applications; and
• specific situations where placement of new transmission and distribution facilities is
constrained by land availability, public opposition, etc.
In the U.S., distributed generation has been rising steadily. It has grown from 10
gigawatt-electric (GWe) in 1990 to about 80 GWe in 2005. That represents
approximately 13 percent of the total nameplate capacity of U.S. generation in 2005.
There are a number of states, Connecticut being one of the most progressive in this
respect, who have introduced various incentives to promote distributed generation.
Technology of choice remains reciprocating engines and gas turbines.
All these developments, both in the U.S. and in the international markets, bode very well
for fuel cells. Fuel cells so far represent a miniscule share of worldwide distributed
generation. According to the Fuel Cell Today survey for 2006, total number of fuel cell
units installed worldwide is a little more than 800 representing approximately 100 MW,14
which is approximately 0.125 percent of the total distributed generation capacity in the
U.S. As familiarity and confidence in the reliability and durability of fuel cells grows, as
their superior environmental attributes command economic value, and as prices reduce
because of increased production volume and technology advances, they will command a
greater share of the distributed generation market.
The growth in electric energy consumption over the period 2003 to 2030, if delivered at a
load factor15 of 0.6 requires a generating capacity addition of 4,850 GW. If, as WADE
14 Fuel Cell market Survey: Large Stationary Applications 200615 Load factor is the ratio of the average load to peak load during a specified time interval. Load factor is an indication of efficient energy use.
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predicts, 25 percent of this additional capacity is distributed generation, the annual
distributed generation capacity additions will average 45 GW per year, which at an
assumed price of $2,000/kW would represent annual revenue of $90 billion per year.
Connecticut companies currently employ about 13% of the global fuel cell workforce and
probably a higher proportion for stationary fuel cell employment. Consequently, if fuel
cell attributes permit the capture of 25 percent of the distributed generation market for
units greater than 200 kW and if Connecticut companies capture in excess of 75 percent
of the stationary fuel cell market for units greater than 200 kW, revenues to Connecticut
companies could be approximately $17 billion per year when the distributed fuel cell
market matures.
Portable Power Market for Fuel Cells
Fuel cells have the potential to become an important source of power for the ever-
growing number of mobile electronic devices. Recent advances in electronics technology,
particularly as mobile phones and laptop computers merge to provide users with
broadband wireless and multifunctional portable computing capability, will require
manufacturers to seek power sources that have greater energy densities than the lithium-
ion (Li-ion) or nickel-based batteries in use today. In the year 2000, the total energy
usage for personal electronic devices was 3,500 watt-hours (Wh). By the year 2010, this
annual energy requirement is predicted to jump to 10,500+ Wh with power requirements
ranging from 0.5 to 20 watts.16
Miniaturized fuel cells, using a liquid methanol fuel, show promise in meeting these new
energy density requirements. The main advantages of fuel cells over battery systems
include long run-times, high energy density and storage that allow portable electronic
devices to function for longer periods than those with batteries. Beyond increased
operating times, fuel cells also provide reduced weight, and an increased ease of
recharging, potentially offering greater consumer appeal than batteries. One very specific
16 Pavio, J., Hallmark, J., Bostaph, J., Fisher, A., Mylan, B., Xie, C.G., Developing Fuel Cells for Wireless Communication, Fuel Cells Bulletin, Volume 2002, Issue 04, April 2002, Pages 8-11
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advantage of fuels cells over batteries is the decoupling of energy stored from peak power
delivered. This allows the fuel cell to be sized to a given application more easily than a
battery system offering the consumer reduced size and weight.17
Energy dense fuel cells offer the potential to meet the new power and energy demands for
mobile phones, laptop computers, palm pilots, power tools, personal pagers, and other
remote devices including hearing aids, hotel door locks, smoke detectors, and meter
readers.18 Some estimate that the overall market for portable fuel cells in such electronics
will mirror that of battery systems that presently have a 40 percent per year growth rate
and a current annual market size in excess of $10 billion.19 Other market opportunities
exist for the development and manufacture of fueling cartridges and connectors. Allied
Business Intelligence, a market research company that tracks new technology, estimates
that portable fuel cells will reach annual unit sales of $200 million to $500 million by
2011.
Current market participants include fuel cell developers such as Giner Electrochemical
Systems, Lynntech Industries, Manhattan Scientific, and MTI Micro Fuel Cells;
aerospace integrators such as Ball Aerospace; and well-known electronics participants
including Casio, Samsung, Hitachi, Motorola, and Toshiba.20 Many of these companies
are making substantial financial commitments to commercializing these small fuel cell
systems. As an example, Hitachi is planning to commercialize a methanol-powered fuel
cell for use in electronic devices in 2007 according to Japanese news reports. Hitachi’s
plans to take the fuel cells to market resulted in the establishment of facilities to produce
between 2,000 and 3,000 methanol fuel cells a month.
Many predict that the market demand for micro fuel cells is building towards mass-
market acceptance by 2008. Sales are anticipated to be $510 million worldwide by 2008,
17 Cropper, M., Geiger, S., Jollie, D., Fuel Cells: A Survey of Current Developments, Journal of Power Sources, 131 (2004) 57-6118 Feder, B.J. (March 16, 2003). For smaller fuel cells, a far shorter wait. Available Online: NYTimes.com.19 Dyer, C.K., Fuel Cells for Portable Power Applications, Journal of Power Sources, 106 (2002) 31-34.20 Apanel, G., Johnson, E., Direct Methanol Fuel Cells – Ready to go Commercial?
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with strong growth occurring in 2007 and 2008. By 2013, micro fuel cell markets are
expected to reach $11 billion. This represents a range of PC, mobile phones, personal
digital assistants (PDA), and digital device segments in a variety of industry, military and
healthcare segments.21
It has been projected that the number of jobs created in the portable fuel cell sector for
the year 2021 could range from 2,973 to 3,063 direct jobs.22 It is estimated that if
Connecticut maintains its current relative position of all global jobs related to fuel cells
and hydrogen,23,24 approximately 386 of these jobs will be based in Connecticut.
At the present time, no U.S. company has committed to volume production of DMFC
fuel cells, although micro fuel cells have a window of opportunity to start manufacture in
the United States.25
Transportation
Nearly all cars and trucks run on gasoline or diesel, and they are the main reason why the
U.S. imports more than 55 percent of the oil it consumes (this consumption of oil is
expected to grow to more than 68 percent by 2025). Two-thirds of the 20 million barrels
of oil Americans use each day is used for transportation.26 The combustion of fossil fuels
is a significant contributor of air pollution. Reducing the dependence of oil and
improving environmental performance are two of the main reasons why there is a
substantial opportunity for the application of fuel cell technologies for transportation.
The following table of transportation statistics is the basis for estimating the market for
fuel cells in transportation.
Table I.1 - Selected Transportation Market Statistics 21 Kamarudin, S., Daud, W., Ho, S., Hasran, U., Overview on the Challenges and Developments of Micro-Direct Methanol Fuel Cells (DMFC), Journal of Power Sources, Article in Press, (2006)22 Breakthrough Technologies Estimates for the Year 202123 New Haven Register 6/20/0424 Fairfield County Business Journal 5/31/0425 National Institute of Standards and Technology; ATP Working Paper Series Working Paper 05–0126 http://www.hydrogen.gov
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United States27 Global28 Estimated Global Values29
Total Vehicles in Use 243 million 1,400 millionAnnual Passenger Car Retail Sales
7.5 million 42.8 million
Annual Passenger Car Production
42.8 million 42.8 million
Annual Commercial Vehicle Production
21.1 million 21.1 million
Total Passenger Cars in Fleets
2.95 million 17 million
Total Trucks in Fleets 6.37 million30 36 millionTransit Buses in Use 81 thousand31 460 thousandAnnual Transit Bus Purchases
6 thousand 35 thousand
Number of Service Stations
121,000 to 169,00032 690 to 963 thousand
A very preliminary estimate of the total global revenues from fuel cells and hydrogen
generating equipment was made based on a number of assumptions. Many of these
assumptions require further analysis during the balance of this effort to check them
against the range of assumptions by others. However, it was judged reasonable to make
an initial estimate to provide a rough estimate of the economic impact of hydrogen and
fuel cell transportation on Connecticut.
27Data from National Transportation Statistics published by the Bureau of Transportation Statistics, Department of Energy unless noted28 Data from National Transportation Statistics published by the Bureau of Transportation Statistics, Department of Energy unless noted29 Estimated by ratio of Annual Global Passenger Car Production to Annual Retail Sales of Passenger Cars in the United States30 Does not include utility company fleets which were 498 thousand in 200031 Data from American Public Transportation Association publication, 2006 Public Transportation Fact Book32 2002 Economic Census, Retail Trade, Gasoline Stations U S Census Bureau and Department of Energy Fact Sheet 389, “More Gasoline Stations in 2005” September 12, 2005
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The estimate below was constructed with the following information and rationale:
Officials of the Federal Transit Administration have a goal that fuel cell transit buses will represent 10 percent of purchases by 2015.33
Automakers and energy companies project initial sales of hydrogen fuel cell vehicles in the period 2010 to 2020. Shell projects 50 percent of new auto purchases will be fuel cell cars by 2040.34
Fleet vehicles represent the best opportunity for early application because hydrogen supply infrastructure is simplified.
Penetration of automobiles will range from 5 percent to 50 percent and penetration of heavy duty vehicles will range from 5 percent to 20 percent in the mature model year.
The U.S. Department of Energy’s (DOE) goal for fuel cell cost in 2015 is $30 per kW.35 The assumption is that an automobile fuel cell will be rated at 75 kW and heavy duty vehicle fuel cells will be rated at 150 kW.
Hydrogen refueling stations with either reformers or electrolyzers will cost between $0.25 and $0.5 million dollars per station based on interpretation of estimates.36
Ultimately, 5 to 20 percent of the global filling stations will provide hydrogen fuel over the next twenty years.
Based on these assumptions, the potential market for fuel cell technology in passenger
vehicles range from 2.1 to 21 million cars per year with total delivered fuel cell capacity
between 150 GW and 1,500 GW, and total fuel cell revenues between $4.5 and $45
billion. The potential market for heavy duty vehicles range from 1 to 4 million vehicles
per year with total delivered fuel cell capacity between 150 GW and 600 GW, and total
fuel cell revenues of between $0.45 and $1.8 billion annually.
33 Sisson, Barbara A. Hydrogen and Fuel Cell Bus Initiative, Paving the Way Nationally and Internationally, U. S. Department of Transportation, Federal Transit Administration34 Preparing for the Hydrogen Economy: Transportation Report by The Connecticut Academy of Science and Engineering for The Connecticut Department of Transportation, June 200635 U. S. Department of Energy; Hydrogen, Fuel Cells and Infrastructure Technologies Multi-Year Program Research, Development and Demonstration Plan for 2003-2010, February 200536 “A Near-Term Economic Analysis of Hydrogen Fueling Stations” Jonathan Weinert, 2005, Institute of Transportation Studies, University of California, Davis UCD-ITS-05-04
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Since Connecticut companies face significant competition for fuel cells used in the
passenger vehicle sector, it seems reasonable to assume their market share would be 10 to
20 percent or between $0.5 and $9 billion annually. There is less competition for the
heavy-duty vehicle market; consequently, Connecticut companies’ share could be 20 to
40 percent or between $0.1 to $0.7 billion annually.
The potential market for filling stations, with the assumptions noted above, would result
in 1,700 to 10,000 stations being implemented each year, and revenues from hydrogen
generating equipment in these stations resulting in $0.5 to $5 billion dollars to the
manufacturers of electrolysis or reformer equipment. If Connecticut companies gain
between 10 and 25 percent of these revenues, the revenue flow to Connecticut companies
would range between $50 million and $1.25 billion annually.
Generally the lower end of the ranges of impact described above are associated with more
success in alternative technologies to fuel cells and hydrogen, less aggressive promotion
in the form of government incentives, and failure to achieve the objectives of fuel cell
development programs. The higher end of the range is associated with opposite results
for each of these factors.
Summary of Potential Global Markets
A summary of the mature annual markets for hydrogen and fuel cell technology in
stationary, transportation and portable electronics is provided in the table below. These
market estimates are preliminary and solely for the purpose of giving a perspective on the
economic opportunity for the industry and to Connecticut participants in this industry. A
more detailed analysis of the potential markets, and the potential share for Connecticut
companies will be undertaken in the Final Plan.
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Table I.2 – Summary of Mature Markets for Stationary and Portable Power, and Transportation
Market Global Opportunity Global Opportunity
(Annual Revenues –
Billion Dollars)
Opportunity for
Connecticut
Companies
(Annual Revenues—
Billion Dollars)
Stationary Power 11.25 (GW) $22.5 $17
Transportation Power 300 to 2,100 (GW) $5.5 to $52 $0.6 to $11
Portable Power 10,500 (Wh) $11 $1.4
No CT OEM’s in this
market, but activity at
CGFCC could provide
opportunity
Other Market Drivers
Policy
Many local, state and federal government agencies have also recognized the public value
of hydrogen and fuel cell energy technology as a distributed generation resource, and
have helped to strengthen the market with statutory, regulatory, and administrative
provisions that help to increase market penetration, as follows:
the Connecticut General Assembly has already recognized hydrogen and fuel cell
technology as a viable Class I renewable resource to meet renewable portfolio
standards and that can provide on-site renewable distributed generation;37
the Connecticut Clean Energy Fund is implementing Project 100 and other
renewable energy programs that include the development of fuel cells and
hydrogen technology;38
the Governor’s commitment to the Regional Greenhouse Gas Initiative (RGGI) to
reduce greenhouse gas emissions.39 The RGGI agreement will stabilize carbon 37 Connecticut General Statutes, Sec. 16-1. Definitions38 Connecticut General Statute section 16-244c39 Connecticut Climate Change Initiative- http://ctclimatechange.com/index.html
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dioxide emissions from the region’s power plants at current levels from 2009 to
2015. This will be followed by a 10 percent reduction in emissions by 2019;40
the Governor’s “Connecticut’s Energy Vision for a Cleaner, Greener State” which
includes an initiative for “Advance Development of Connecticut’s Hydrogen
Economy”; and
other state and local agencies have engaged in the siting of fuel cell technology,
with some of the siting processes streamlined for accelerated development based
on community support.41
With strategic guidance, applications using hydrogen and fuel cell technology would
meet the functional energy needs of the state to improve efficiency, reduce consumption
of fuel, and improve the environmental profile for energy production. Identified energy
benefit drivers from use of fuel cells and hydrogen technology would also include:
clean and nearly emission free operation;
ease of siting and regulatory approval for facility development;
efficient operation that will conserve on fuel costs, and can reduce the
import of foreign oil;
flexibility to act as a bridge that can lead to widespread use of renewable
fuels including methane or ethanol from biomass, and hydrogen produced
by solar and wind energy;
improved reliability with uninterrupted power to critical load centers
without the need to build and rely on electric transmission lines; and
operation that can reduce Federally Mandated Congestion Charges.
Other functional drivers for development include government or government created
incentives for renewable energy, research and development, and installation of hydrogen
and fuel cell technology.
Energy Supply
40 Governor Rell Press Release, Governor Rell Says Conn. Taking Critical Steps on Energy Independence and Environmental Protection, December 20, 200541 Connecticut General Statute section 16-50k
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According to a study by the Electric Power Research Institute (EPRI Report 1004451,
January 2003), the U.S. economy loses from $104 - $164 billion annually to power
outages.42 The need for new efficient, cost effective, and clean distributed generation has
been well documented. For system-wide planning within New England, the Independent
System Operator of New England (ISO) issued their 2006 Regional System Plan with an
Installed Capacity Requirement Analysis based on Loss-of-Load-Expectation (LOLE)
standards. This analysis, which assumed 2,000 MW of transmission tie-line benefits,
concluded that New England would need approximately 173 MW by summer 2009,
increasing annually to 4,300 MW by 2015 to meet demand and capacity requirements.
ISO also undertook an Operable Capacity Analysis to estimate the net capacity that will
be available under specific load scenarios. This analysis concludes that under 50/50 peak
load conditions, New England could experience a negative operable capacity margin of
approximately 406 MW by 2008 growing to 4,401 MW by 2015. Under 90/10 peak load
conditions, New England could experience a negative operable capacity margin of
approximately 1,686 MW by 2007 growing to 6,571 MW by 2015. ISO also concluded
that adding new resources in the Greater Connecticut sub areas of Norwalk, Southwest
Connecticut, and Connecticut would contribute the most to the system resource adequacy
compared with adding resources in other sub areas of New England.43
Further, pursuant to Public Act 05-01, An Act Concerning Energy Independence
(AACEI), the Connecticut Department of Public Utility Control (DPUC) was mandated
to issue a request for proposals (RFP) for projects to reduce Federally Mandated
Congestion Charges (FMCCs) in Connecticut. London Economics International LLC
(LEI) was retained by the DPUC to help develop the RFP required by the AACEI.
The conclusions for this docket are generally consistent with the need for Connecticut to
develop additional generation resources to reduce FMCCs and to meet capacity
requirements.
42 California Distributed Energy resource Guide; http://www.energy.ca.gov/distgen/markets/end_use.html43 ISO New England, Inc.; 2006 Regional System Plan, October 2006
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Air Emissions
Primary Air Pollutants
The Clean Air Act requires the Environmental Protection Agency (EPA) to set National
Ambient Air Quality Standards (NAAQS) for pollutants considered harmful to public
health and the environment. The EPA Office of Air Quality Planning and Standards
(OAQPS) has set NAAQS for six principal pollutants, which are called “criteria”
pollutants.44 The Connecticut Department of Environmental Protection (DEP) monitors
these six air pollutants -- sulfur dioxide (SO2), lead, carbon monoxide (CO), particulates,
nitrogen oxides (NOx), and ground-level ozone across the state.
The 1980s were a time of transition for air quality. With new automobiles equipped with
catalytic converters, nitrogen dioxide (NO2), carbon monoxide and volatile organic
compounds (VOCs) were greatly reduced. The phasing out of leaded gasoline dropped
the lead pollution to lower levels. New air pollution control technologies for stationary
sources, including lower sulfur fuels, reduced sulfur dioxide, NO2 and VOCs. Since 1975,
ambient levels of sulfur dioxide and carbon monoxide have decreased by 66 percent;
ozone by 60 percent; and nitrogen dioxide by 45 percent. Particulate matter with diameter
10 microns or less (PM10) has dropped 45 percent since 1985 and lead has shown the
biggest decrease shrinking by 93 percent since 1975. However, even with the decline in
monitored levels of all these pollutants, more progress remains to be made.45
Violations of the health-based air quality standards have been nearly eliminated for all
pollutants except ground-level ozone. In the Earth’s lower atmosphere, ground level,
ozone is formed when pollutants emitted by cars, power plants, industrial boilers,
refineries, chemical plants, and other sources react chemically in the presence of sunlight.
Ozone pollution is a concern during the summer months when the weather conditions
needed to form ground-level ozone normally occur.46 Motor vehicles remain a major
source of ozone-forming emissions despite improvements in tailpipe standards. Much of
44 U. S. Environmental Protection Agency45 Connecticut Department of Environmental Protection46 Airnow.gov; Ozone and Your Health; http://airnow.gov/index.cfm?action=static.ozone2#1
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the ground-level ozone originates in states west of Connecticut.47 Consequently, the
reduction of pollutants such as VOCs and nitrogen oxides from power plants and vehicles
west of Connecticut could significantly reduce the formation of ground-level ozone that
adversely affects Connecticut’s ambient air quality.
Several groups of people are particularly sensitive to ground-level ozone, especially when
they are active outdoors because physical activity causes people to breathe faster and
more deeply. Active children are the group at highest risk from ground-level ozone
exposure because they often spend a large part of the summer playing outdoors. Children
are also more likely to have asthma, which may be aggravated by ground-level ozone
exposure. In addition, people with asthma or other respiratory diseases that make the
lungs more vulnerable to the effects of ozone will generally experience health effects
earlier and at lower ozone levels than less sensitive individuals. Ozone may irritate one’s
respiratory system, reduce lung function, aggravate asthma, inflame and damage cells
that line one’s lungs, aggravate chronic lung diseases such as emphysema and bronchitis
and reduce the immune system’s ability to fight off bacterial infections in the respiratory
system.48
Greenhouse Gas Emissions
Gases that trap heat in the atmosphere are often called greenhouse gases (GHG). Human
activities release GHG emissions and contribute to increasing concentrations of GHG in
the atmosphere. CO2 is the predominant GHG emitted by human sources. Increased
production of CO2 by human sources has caused total GHG emissions to exceed natural
absorption rates, resulting in increased atmospheric concentrations. Since the beginning
of the industrial revolution, atmospheric concentrations of CO2 have increased by nearly
30 percent, methane (CH4) concentrations have more than doubled, and NOx
concentrations have risen by approximately 15 percent. Energy-related activities were the
47 Council on Environmental Quality, Environmental Quality in Connecticut, 2005 Annual Report, p. 32.48 Airnow.gov; Ozone and Your Health; http://airnow.gov/index.cfm?action=static.ozone2#1
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primary sources of U.S. anthropogenic GHG emissions, accounting for 86 percent of total
emissions on a carbon equivalent basis in 2004.49
Figure I.4 - U.S. Greenhouse Gas Emissions by End-Use Economic Sector, 1990–200350
On December 20, 2005, seven states, including Connecticut, announced an agreement to
implement the Regional Greenhouse Gas Initiative (RGGI). RGGI is a cooperative effort
by Northeast and Mid-Atlantic states to discuss the design of a regional cap-and-trade
program initially covering carbon dioxide emissions from power plants in the region. In
the future, RGGI may be extended to include other sources of greenhouse gas emissions,
and greenhouse gases other than CO2.51
Connecticut’s goals are to have air that meets all health-based standards every day by the
year 2010. 52 In addition, Connecticut is committed to reducing regional GHG emissions
to 1990 emissions by 2010 (short-term goal), at least 10 percent below 1990 emissions by
2020 (mid-term goal), and to reducing regional GHG emissions sufficiently to eliminate
49 U.S. EPA; Inventory of U.S. Greenhouse Gas Emissions and Sinks: 1990-2004, April 200650 U.S. EPA; Greenhouse Gas Emissions from the U.S. Transportation Sector, 1990-2003, March 200651Regional Greenhouse Gas Initiative; http://www.rggi.org52 Council on Environmental Quality, Environmental Quality in Connecticut, 2005 Annual Report, p. 32.
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any dangerous threat to the climate (current science suggests this will require reductions
of 75–85 percent below current levels).53,54
The use of fuel cells, and especially fuel cells that utilize hydrogen provide high value for
improving air quality and reducing GHG emissions. Although the value of this
incremental benefit is substantial in terms of health, this value is not easily measurable
and often goes unrealized. Nonetheless, such value will be assessed within the Final Plan
to help provide information for appropriate long-term decision.
53 Connecticut Department of Environmental Protection54 New England Governors/Eastern Canadian Premiers - Climate Change Action Plan 2001
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PART II
Analysis of Connecticut’s Hydrogen and Fuel Cell Industry
Description of Fuel Cells and Hydrogen55
Fuel Cells
A fuel cell is a device that uses hydrogen (or a hydrogen-rich fuel) and oxygen to create
an electric current. The amount of power produced by a fuel cell depends on several
factors, including fuel cell type, cell size, the temperature at which it operates, and the
pressure at which the gases are supplied to the cell. A single fuel cell produces enough
electricity for only the smallest applications. Therefore, to provide the power needed for
most applications, individual fuel cells are combined in series into a fuel cell stack. A
typical fuel cell stack may consist of hundreds of fuel cells.
Fuel cells have the potential to replace the internal combustion engine in vehicles and
provide power for stationary and portable power applications. They can be used in
transportation applications, such as powering automobiles, buses, cycles, and other
vehicles. Many portable devices can be powered by fuel cells, such as laptop computers
and cell phones. They can also be used for stationary applications, such as providing
electricity to power homes and businesses.
Fuel cells are cleaner and more efficient than traditional combustion-based engines and
power plants. When pure hydrogen is used to power a fuel cell, the only by-products are
water and heat—no pollutants or greenhouse gases are produced. Since fuel cell
technology is more efficient than combustion-based technologies, less energy is needed
to provide the same amount of power. Finally, because hydrogen can be produced using a
wide variety of resources found right here in the United States—including natural gas, 55 Refer to Appendix B: Comparison of Fuel Cell Technologies; The Connecticut Hydrogen-Fuel Cell Coalition, February 2006.
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biological material, and even water—using hydrogen fuel cells reduces our dependence
on other countries for fuel.56
Fuel cells are classified primarily by the kind of electrolyte they employ. This determines
the kind of chemical reactions that take place in the cell, the kind of catalysts required,
the temperature range in which the cell operates, the fuel required, and other factors.
These characteristics, in turn, affect the applications for which these cells are most
suitable. There are several types of fuel cells currently under development, each with its
own advantages, limitations, and potential applications, including polymer electrolyte
membrane (PEM), direct methanol fuel cell (DMFC), alkaline fuel cell (AFC),
phosphoric acid fuel cell (PAFC), and solid oxide fuel cell (SOFC).
Hydrogen
Hydrogen is the lightest and most abundant element in the universe. In its pure form
(H2), it is a colorless and odorless gas. However, since it combines easily with other
elements, hydrogen is rarely found by itself in nature and is usually found as a part of
other compounds, including fossil fuels, plant material, and water. Hydrogen is an energy
carrier, not an energy source, meaning that it stores and delivers energy in a usable form.
Like electricity, the most familiar energy carrier, it can be generated from a wide range of
sources. While hydrogen contains more energy per weight than any other energy carrier,
it contains much less energy by volume.
Hydrogen can be produced using a variety of domestic energy resources, including fossil
fuels, such as coal and natural gas, renewables, such as biomass, electricity from
renewable energy technologies, and thermal energy or electric power from nuclear.
Since it can be produced from several sources using various methods, hydrogen can be
produced at large production plants and transported to users. It can also be produced
locally, using small generators, possibly at refueling stations, eliminating the need for
long-distance transport. Hydrogen is currently transported by road via cylinders, tube 56 U.S. Department of Energy
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trailers, cryogenic tankers, and in pipelines. However, hydrogen pipelines currently only
exist in a few regions of the United States. The delivery infrastructure for hydrogen will
require high-pressure compressors for gaseous hydrogen and liquefaction for cryogenic
hydrogen. Both currently have significant capital and operating costs, and energy
inefficiencies. Hydrogen may be stored as a liquid, a high pressure gas, or by chemical
methods; all are under intense development.
Fuel Cells
Connecticut Fuel Cell Companies
Connecticut industry has been involved with hydrogen and fuel cell technologies since
the 1950s. Connecticut Companies were involved early with electrolysis systems for
submarines and spacecraft applications and with fuel cells for spacecraft. Since the
1960s Connecticut companies pioneered application of fuel cell technology to stationary
power applications and continue to lead the world in this fuel cell application. Beginning
in the 1990s, Connecticut companies have participated in application of fuel cell and
hydrogen generation technology to transportation applications.
Table II.1 identifies activity by Connecticut companies in the development and
manufacture of fuel cells and fuel cell components.
Table II.1 - Connecticut Fuel Cell Companies
Company Alkaline Fuel Cells
Proton Exchange Membrane Fuel Cells
Phosphoric Acid Fuel Cells
Molten Carbonate Fuel Cells
Solid Oxide Fuel Cells
Aerogel Composite Inc.
www.aerogelcomposite.com
Electrode Catalyst Research
FuelCell Energy, Inc.
www.fce.com
Commercial for stationary
Research and Development
GenCell Corporation
www.gencellcorp.com
Components supply
Stationary demonstrations
Components supply
Infinity Fuel Cell and Research and
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Hydrogen, Inc.
www.infinityfuel.com
Development for Regenerative Fuel Cells
Parker Hannifin Corporation
www. parker.com
Cell stack components
Cell stack components
Ancillary components
US Nanocorp
www.usnanocorp.com
Research and Development
UTC Power
www.utcpower.com
Commercial for Space craft
Bus and Auto Demonstrations, Back-up Power Demonstrations
Commercial for Stationary
Three of the Connecticut companies are original equipment manufacturers:
1) FuelCell Energy, Inc. is headquartered in Danbury with a manufacturing facility
in Torrington. FuelCell Energy, Inc. is the global leader in molten carbonate fuel
cell products with power plant ratings from 300 to 2,400 kWs. To date,
installations at over 50 customer sites in the U.S., Europe, and Asia (September
2006 presentation at www.fce.com) have generated over 129 million kilowatt
hours (kWh) of electricity in stationary applications using natural gas or anaerobic
digester gas from waste water treatment plants. Future product research and
development involves a combined cycle plant which integrates the molten
carbonate fuel cell with a gas turbine, a diesel fueled power plant for shipboard
power and a power plant which co-produces hydrogen for use as a vehicle fuel.
FuelCell Energy is also involved with R&D of solid oxide fuel cells and leads a
project team under the Department of Energy Solid State Energy Conversion
Alliance (SECA) program. This R&D is managed in Danbury, but is carried out
in Colorado and Canada by Versa, which is partially owned by FuelCell Energy,
Inc.
2) UTC Power is a unit of United Technologies Corporation located in South
Windsor. UTC provided the alkaline fuel cell power plants used in the Apollo
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lunar program in the 1960s and 1970s; a more advanced alkaline fuel cell by UTC
is used in the space shuttle vehicle. UTC pioneered stationary applications of fuel
cells with phosphoric acid fuel cells. After demonstration activities in the 1960s,
1970s and 1980s, it produced the initial commercial fuel cell product with
deliveries beginning in 1992. The third version of this 200 kW product is now in
production. Installations of more than 270 of these power plants have occurred in
85 cities and 19 countries and the fleet has accumulated over eight million hours
and 1.4 billion kWh of successful operation to date (www.utcpower.com). In the
1990s, UTC began development of proton exchange membrane technology for
undersea and vehicle applications and currently has demonstration power plants in
automobiles of three different manufacturers. The largest demonstration fleet is a
32 vehicle fleet funded under a U.S. DOE program in which UTC is a member of
a team that includes Chevron and Hyundai.57 UTC also provides fuel cells for
revenue service transit buses in California that are the most advanced in the world
in terms of efficiency, durability, and performance. UTC also has R&D activity
ongoing in SOFC and stationary PEM fuel cells.
3) GenCell Corporation, located in Southbury, is a fuel cell developer and
manufacturer with a “design for continuous manufacture” approach to help make
fuel cells economically attractive. GenCell’s system product, a MCFC system
suitable for the mid-size stationary power user (40–125 kW) is in its
demonstration phase. GenCell also has a fuel cell components business,
involving the sale of its metallic bipolar plates to proton exchange and solid oxide
fuel cell manufacturers.58
57 UTC Press Release dated February 18, 200558 GenCell Corporation
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Core Competencies of Connecticut Fuel Cell Companies
Connecticut companies are unquestioned leaders in AFC, PAFC, and MCFC, are among
the global leaders in PEM fuel cells, and a key participant in the SOFC activity sponsored
by the U.S. DOE. Connecticut companies are also recognized as leaders in the integrated
design of power plants for spacecraft and large (hundreds of kW) stationary applications
and among the leaders in vehicle power plant integration. For stationary power plants, the
system includes conversion of hydrocarbon fuels such as natural gas, digester gas and
petroleum products to hydrogen, conversion of direct current power to alternating
current, recovery of useful heat, and operating multiple power plants in parallel with the
grid and/or with other power plants. With installation of hundreds of power plants
throughout the world, and operation of these power plants for millions of hours, these
Connecticut companies have unequaled experience with demonstrations and product
support including application design, installation, parts supply and maintenance.
Market Focus of Connecticut Fuel Cell Companies
The focus of Connecticut OEMs is on spacecraft applications, stationary applications for
primary power in the hundreds of kW and above range, and replacement of battery back-
up power through hydrogen fuel cells and regenerative fuel cells. Within the stationary
power market place, emphasis is on customers with (1) a need for very reliable power, (2)
customers with waste gas from anaerobic digester processes, (3) customers with
combined heat and power loads which can take advantage of all the outputs of the fuel
cell power plants, and (4) customers in situations where the distribution of central station
power is extremely costly or where environmental factors are major determinants of
purchase decisions.
Connecticut companies who manufacture standard and unique fuel cell components are
marketing to fuel cell OEMs throughout the world.
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Connecticut has no companies who are strongly focused on small (several kW) stationary
fuel cells or on portable fuel cell applications such as power for personal computers and
communications devices.
Major Issues Facing Connecticut Fuel Cell OEMs
Connecticut’s fuel cell companies face the same issues as other fuel cell companies
throughout the world. These include:
Reducing manufactured cost to competitive levels even for specialized application
to low volume markets. Fuel cells are not competitive without subsidies for mass
markets in stationary and in particular vehicle applications. Costs are still integer
multiples of the required levels.
Demonstrating the durability and reliability in long term commercial service to
validate fuel cell technical and economic characteristics.
Developing market distribution channels and financial product offerings which
facilitate use of fuel cells in situations where the ultimate customer focuses on the
application of capital expenditures to the core business.
Uncertainties regarding infrastructure investments needed to provide hydrogen
fuel for vehicle fuel cell power plants.
Uncertainties regarding production of hydrogen-fueled vehicles by vehicle OEMs.
Securing long-term investment in fuel cell research, development, manufacturing
and marketing especially when compelling evidence of market acceptance is
lacking.
Capturing economic value from the environmental characteristics of fuel cells
which provide social benefit, but which are not recognized in economic decision-
making.
Instituting government policies which facilitate capturing benefits of distributed
generation.
Acceptance of standards, codes and regulations associated with the use of
stationary fuel cell power plants and hydrogen-fueled vehicles and their
infrastructure.
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Government decisions regarding incentives and regulatory policies favorable to
hydrogen fueled vehicles.
Hydrogen
Connecticut Hydrogen Companies
Connecticut companies have been involved with hydrogen generation for decades;
Praxair has been involved with hydrogen supply for industrial and commercial purposes
for many years. Delivery of electrolysis units by Connecticut companies began with
installation of an electrolysis unit on the submarine Nautilus in the 1950s. While the
desired product from these electrolysis units is oxygen, they also produce hydrogen.
Table II.2 shows activity by Connecticut Hydrogen Companies. Note that two
Connecticut fuel cell companies that generate hydrogen internal to the power plant have
hydrogen generation capabilities.
Table II.2 - Connecticut Hydrogen Companies
Company Electrolysis Generating Hydrogen from Hydrocarbons
Overall Supply of Hydrogen
Avalence
www.avalence.com
High pressure Systems for industrial and transportation
Hamilton Sundstrand Div. UTC
www.hamiltonsundstrandcorp.com
Electrolysis Systems for oxygen generation aboard spacecraft and submarines
Praxair
www.praxair.com
Supplier of industrial gases including hydrogen
Proton Energy Systems
www.protonenergy.com
Electrolysis systems for industrial applications and for demonstration transportation applications
Treadwell
www.treadwell.com
Electrolysis systems for submarine application
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Fuel Cell Companies involved with Hydrogen Generation Technology
FuelCell Energy, Inc.
www.fce.com
By-product hydrogen available from fuel cell power plant
UTC Power
www.utcpower.com
Generation of hydrogen for internal use in fuel cell system
GenCell Corporation
www.gencellcorp.com
Generation of hydrogen for internal use in fuel cell system
Infinity Fuel Cell and Hydrogen, Inc.
www.infinityfuel.com
Electrolysis systems used to generate hydrogen as part of a regenerative fuel cell system
Two of the Connecticut Companies involved with electrolysis (Treadwell and the
Hamilton Sundstrand Division of United Technologies) focus their electrolysis products
on oxygen generation for submarines and spacecraft. Treadwell systems have been
installed on over 100 submarines in the U.S. Navy fleet beginning with the submarine
Nautilus in the 1950s.
Proton Energy Systems, a subsidiary of Distributed Energy Systems Corporation
produces electrolysis systems for the purpose of hydrogen generation for industry,
utilities, and for demonstrations of hydrogen vehicle systems. The company has installed
over 750 hydrogen generators in more than 41 countries.59 Proton is also involved with
application of its hydrogen generators in combination with a fuel cell power generator for
use as an electric energy storage device.
Praxair is an industrial gas company tracing its business back to 1917. It produces
specialty gases including hydrogen and distributes hydrogen by truck and pipeline to
industrial customers throughout the world. Praxair is involved with demonstration
projects associated with hydrogen-fueled vehicles and, together with Proton Energy
Systems also provides on-site generation of hydrogen through electrolysis.
59 Distributed Energy Systems Corporation Form 10-K filed on March 10, 2006
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The major fuel cell OEMs in Connecticut are involved with generating hydrogen from
hydrocarbon fuels such as natural gas. UTC uses hydrogen generation technology in its
fuel cell power plants as an independent hydrogen generator. FuelCell Energy is
developing technology to permit co-production of hydrogen from its fuel cell power
plants.
Core Competencies of Connecticut Hydrogen Companies
Connecticut hydrogen companies have expertise covering the entire range of hydrogen
generation and distribution. Manufacture and product support capabilities of stand-alone
hydrogen systems is associated with electrolysis systems. (Hydrogen generators are also
included in fuel cell power plants manufactured by Connecticut companies.) Praxair is
one of several leading industrial gas companies and has experience in the complete range
of hydrogen generation and distribution including demonstration activity associated with
supply of hydrogen for vehicles. It should be noted that while Praxair is headquartered
and distributes hydrogen in Connecticut, its hydrogen generation facilities are located in
other states.
Market Focus of Connecticut Hydrogen Companies
Connecticut companies that use electrolysis for on-site production of hydrogen and
oxygen focus on industrial, laboratory and utility customers. The integrated industrial
gas supply company, Praxair, focuses on hydrogen for industrial and laboratory
applications. Many of the Connecticut hydrogen companies are involved with
demonstration of hydrogen supply for vehicle use, usually as part of a U.S. DOE or state
funded activity.
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Major Issues Facing Connecticut Hydrogen Companies
The issues faced by Connecticut’s Hydrogen Companies are essentially the same as those
faced by Connecticut Fuel Cell companies. These issues include cost, commercial
service, market distribution, risk, investment, and government/regulatory guidance, as
discussed above.
Fuel Cell and Hydrogen R&D and Manufacturing Companies in Other States
Connecticut companies dominated U.S. and world-side fuel cell efforts through the
1980s. Beginning in the early 1990s, interest increased in fuel cells for vehicles
combined with demonstrations of reasonable fuel cell performance in stationary
applications and advances in proton exchange membranes. The possibility of extending
fuel cell application to vehicles opened a greatly increased fuel cell market and brought
the financial strength of the global auto manufacturing industry to bear on the technical
problems. As a consequence, OEM fuel cell activity in other states and in other countries
has gained significant strength eroding the relative position of Connecticut companies.
Other efforts involved with supplying hydrogen to fuel cells also accelerated, and
Connecticut’s position has been threatened.
A survey by fuel cell industry organizations in the U.S., Canada, Europe, and Japan
shows global sales of $353 million dollars, nearly 7,100 employees and R&D
expenditures of $796 million dollars. Seventy percent of the fuel cell companies
responding to the survey are headquartered in the U.S. (40 percent) and Canada (30
percent); Japan and Germany are other countries with large numbers of fuel cell
companies. These four countries account for ninety three percent of global fuel cell R&D
expenditures and eighty nine percent of the global employment in fuel cells. Technology
focus by the respondents is highest for proton exchange membrane (46 percent), solid
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oxide (14 percent) and direct methanol (9 percent) fuel cell companies.60 The other fuel
cell technologies (phosphoric acid, molten carbonate and alkaline) have fewer
participants, in part because of the dominance of Connecticut companies in these fields.
The survey was sent to 490 organizations and 180 responded.
A directory of North American fuel cell companies listed by Fuel Cell Today
(www.fuelcelltoday.com) indicates there are over 800 organizations in North America
with interests in fuel cells. There are over 100 members of the US Fuel Cell Council
(www.usfcc.com) and 100 members of the National Hydrogen Association
(www.hydrogenassociation.org). These organizations include OEMs, suppliers to OEMs,
fuel cell installers, academic and government institutions, law firms, etc.
Other States Where There is Significant OEM or Major Supplier Activity in Fuel Cells and Hydrogen
Appendix A, Tables IV.1, IV.2, and IV.3 focus on companies in 14 states other than
Connecticut where there is significant manufacturing activity. Companies were
identified from the member listings in the US Fuel Cell Council, the National Hydrogen
Association, and other sources. Many other companies who are involved in fuel cells in a
less significant way are not included in the listing.
Appendix A, Tables IV.1 and IV.2 identify key companies in the neighboring States of
Massachusetts and New York. In these states, activity in solid oxide fuel cells, lower
rated stationary proton exchange membrane fuel cells and direct methanol fuel cells for
portable electronic applications exceeds the level of activity for these applications in
Connecticut. A recent article indicated there are more than 80 fuel cell related companies
60 US Fuel Cell Council; 2006 Worldwide Fuel Cell Industry Survey
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in Massachusetts.61 New York has the major U.S. auto company fuel cell research and
development in GM’s efforts in the Rochester area (both Ford and DaimlerChrysler
utilize fuel cells by Ballard, a Canadian company, in their vehicles) as well as leading
companies in small proton exchange membrane power plants (Plug Power) and fuel cells
for portable electronics (MTI Micro Fuel Cells).
Appendix A, Tables IV.3 identifies manufacturing companies in 12 other states who are
involved with fuel cells and/or hydrogen. Only one U S. headquartered energy company,
Chevron, is listed although BP and Shell are active in hydrogen in the U S. Air Products,
headquartered in Pennsylvania, and Praxair, headquartered in Connecticut are the U.S.
industrial gas companies involved with hydrogen. Air Liquide, Linde and British
Oxygen Company are also interested in hydrogen and have U.S. operations, but they are
headquartered outside the U.S.
Delaware listings include DuPont and two companies whose business is based on DuPont
materials indicating the strength of a significant technology company to generate
additional business activity. Michigan and Ohio are both states with significant suppliers
to the auto companies and the fuel cell activity in those states is strongly focused on auto
applications of fuel cells and hydrogen. Ohio has made an effort to have hydrogen-
related companies from other states and countries locate in Ohio. Rolls-Royce recently
located its U.S. fuel cell activity in Ohio and UltraCell, a California company is locating
its manufacturing activity in Ohio.62 The decision by Rolls-Royce has attracted interest
from Japanese companies to locate/relocate in Ohio as well.63 Some of the companies
identified in Table IV.3 are efforts of companies located elsewhere. For example, Versa
Power Systems in Colorado is partially owned by Connecticut’s FuelCell Energy, and the
Siemens effort in Pennsylvania was part of the acquisition of Westinghouse business
activity by Siemens of Germany.
61 Tewksbury Advocate, November 17, 2005, reported by Fuel Cell Works62 Akron Beacon, December 2, 2006 “Rolls-Royce fuels Ohio's tech plans,” Paula Schleis63 Cleveland Plain Dealer, November 12, 2006
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Fuel Cell and Hydrogen R&D and Manufacturing Companies in other Countries
There is significant activity by other companies in other countries, as indicated by the
2006 Worldwide Fuel Cell Industry Survey information presented in PART I. Ninety
percent of the fuel cell companies responding to the recent survey are in North America,
Europe and Japan. Activity in countries other than the U.S. is summarized below.
Canada has significant activity. British Columbia is the headquarters for Ballard, a leader
in PEM Fuel Cells (www.ballard.com), Angstrom Power (www.angstrompower.com),
and General Hydrogen Corporation (www.generalhydrogen.com). Ontario is
headquarters for another PEM fuel cell company, Hydrogenics (www.hydrogenics.com)
and Alberta is one of the locations for Versa Power Systems (www.versa-power.com).
Other Canadian companies involved with fuel cells can be identified through the
organization Hydrogen and Fuel Cells Canada (www.h2fcc.ca).
In Europe, two German auto companies have pioneered use of fuel cell power plants in
vehicles. DaimlerChrysler has been very active in pioneering use of PEM fuel cells
manufactured by Ballard in autos and buses (www.daimlerchrysler.com). BMW has
experimented with fuel cell auxiliary power units (www.bmw.com). As noted
previously, European energy companies, BP (www.bp.com) and Shell (www.shell.com)
are very active globally in developing the technology for hydrogen infrastructure and
demonstrating it throughout the world. Also, as noted previously, the industrial gas
companies located in Europe, Air Liquide (www.airliquide.com), British Oxygen
Company (www.bocindustrial.co.uk), and Linde (www.linde-gas.com) are also involved
with the hydrogen infrastructure. Other European companies involved with fuel cells are
identified in the member listings for Fuel Cell Europe (www.fuelcelleurope.org).
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Japan has many companies involved with fuel cells including:
the major auto companies, Honda, Nissan and Toyota who have their own
research, development and demonstration programs,
major industrial companies such as Asahi Glass, Fuji, Hitachi, Mitsubishi
Electric, Sanyo and Toshiba, and
energy companies such as Nippon Oil, Osaka Gas, Tokyo Gas and Tokyo Electric
Power.
Other Japanese companies are identified on the member listing of the Fuel Cell
Commercialization Conference of Japan (www.fccj.jp).
Other efforts are being carried out in Korea where Hyundai (www.Hyundai-motor.com)
is developing fuel cell powered automobiles and is a participant in the U.S. DOE fuel cell
demonstration project with UTC Power and in Australia where Ceramic Fuel Cells Ltd.
(www.cfcl.com) is developing Solid Oxide Fuel Cells.
Connecticut Companies’ Positioning in Fuel Cells and Hydrogen
Tables II.3 and II.4 illustrate the position of Connecticut companies in fuel cells and
hydrogen, compared to other states. The assessment of position is based on information
provided in the sections above.
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Table II.3 - Connecticut Companies’ Fuel Cell Position Compared to other States64
Alkaline PEM DMFC PAFC MCFC SOFC
Spacecraft and Submarines
Dominant Good
Small Stationary
Poor Poor Fair
Large Stationary
Dominant Dominant Fair
Vehicle Good Good Fair
Portable Poor Poor
While the activity in fuel cells for new spacecraft and submarines is limited, alkaline fuel
cells supplied by a Connecticut company have been the only source of electric power for
manned spacecraft since the 1960s. Connecticut companies have been involved with
application of both alkaline and PEM fuel cells to submarines and no other state has
significant achievements in this area. Siemens (Germany) activity with fuel cells in
submarines is currently the most extensive. UTC Power continues to have activity in this
area with PEM fuel cells.
PEM fuel cells are under intensive development with applications including small
stationary, vehicles and portable applications. While Connecticut companies participate
in small stationary back-up power development with PEM, efforts by New York and
Massachusetts companies involve significant numbers of demonstration units. Although
many companies, including captive efforts by auto companies, are involved with PEM
fuel cells for vehicles, at least one Connecticut company is involved with both
automobile and bus applications with different automobile and bus OEMs. Individual
64 Where a blank occurs in this table, there is no significant application of that fuel cell technology for the particular application.
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efforts by vehicle OEMs and Canadian company, Ballard, are at the same level or involve
more extensive demonstration activity than Connecticut.
With the exception of contract efforts at the Connecticut Global Fuel Cell Center
(CGFCC), Connecticut has no activity in DMFC. A number of companies including
captive efforts by electronics companies and efforts by other companies in the U.S.
including those from Massachusetts and New York are significant in the DMFC and
PEM efforts for portable fuel cells.
Connecticut companies are global leaders in the application of PAFC and MCFC
technologies to larger (hundreds of kW to megawatts (MW)) stationary power
applications. There are development efforts in Japan in both technologies and one small
activity in the US, but there are no companies approaching the level of Connecticut
companies.
Connecticut participates in SOFC through R&D by UTC, and by FuelCell Energy
through a partially owned company with facilities in Colorado and Canada, but that
company has not achieved the level of demonstration achieved by companies in other
states and countries.
Table II.4 - Connecticut Companies’ Hydrogen Position Compared to other States
Electrolysis Hydrocarbon
Processing
Storage Distribution
Excellent Fair Poor Excellent
Three Connecticut companies are involved with electrolysis systems; however two
restrict their activity to defense applications. Competition is primarily from a Canadian
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company. While Connecticut fuel cell companies have deep experience with processing
hydrocarbons to hydrogen, they are not currently active in applying their knowledge to
stand-alone hydrogen generation as are other U.S. companies working in this arena.
There are no known efforts by Connecticut companies in hydrogen storage, which is a
key technical hurdle that must be overcome, for hydrogen-fueled transportation. A
Connecticut electrolysis company and an industrial gas company headquartered in
Connecticut are participating in demonstrations of hydrogen fueling stations. This
industrial gas company (one of two headquartered in the U.S.) also has extensive
experience with transportation of hydrogen in the form of gas or liquid by truck and gas
by pipeline.
Efforts in Support of Hydrogen and Fuel Cell Manufacturers
Many states have public or private efforts supporting their fuel cell and hydrogen
industry.
Comparisons are made with seven states that have a significant activity. These states
include: California, Florida, Massachusetts, Michigan, New York, Ohio, Pennsylvania,
and South Carolina. Note that Florida and South Carolina do not have any significant
fuel cell industry, but some of them have significant fuel cell research activities.
Demonstration and Installation Activity
One result of a favorable policy is the increased level of demonstration and installation
activity. Table II.5 identifies hydrogen filling and stationary fuel cell installation
activities in these states.
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Table II.5 - Hydrogen Filling Stations and Stationary Fuel Cell Installations65
Hydrogen Filling Stations
Stationary Fuel Cell Installations (Total/Large)
California 29 59/43
Florida 0 7/1
Massachusetts 0 10/7
Michigan 6 5/2
New York 1 55/26
Ohio 1 10/2
Pennsylvania 1 13/5
South Carolina 0 3/0
Connecticut 1 20/15
The data in Table II.5 can be somewhat misleading because the installation count
associated with small, residential size fuel cell power plants reflects a much lower
expenditure than the installation of larger fuel cell installations (more than 100 kW). It
should be noted that some of the installations have more than one fuel cell power plant
associated with them. Planned, but not completed stations/installations were not included.
Clearly, California has the largest demonstration activity for vehicles as well as the
largest number of stationary fuel cell installations. This is true even though none of the
installed fuel cells were manufactured in California. This is probably because California
is a very large market, has more severe environmental problems, and is reacting to the
environmental problems with legislation and demonstration program activity. Both
California and Michigan are involved with the U.S. DOE vehicle demonstration activity
accounting for the larger number of hydrogen filling stations in these states. The large
number of stationary fuel cell installations in New York and Connecticut reflect the
65 The data were obtained from the World Wide Hydrogen Filing Stations database and the Worldwide Stationary Fuel Cell Database available on the Fuel Cells 2000 website (www.fuelcells.org).
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presence of fuel cell manufacturers in and near these states as well as the environmentally
impacted conditions these states share with California.
The ingredients of state support for hydrogen and fuel cell development include state
planning documents, partnerships among stakeholders, research centers, research and
development expenditures, financial support of demonstrations, incentives for purchase
and use. A comprehensive report on these issues was issued in July 2006 by the
Breakthrough Technologies Institute Inc. “State Activities that Promote Fuel Cells and
Hydrogen Infrastructure Development.”66
Planning and Partnerships
State plans regarding fuel cells and hydrogen are often linked with partnerships in the
form of industry trade groups, and development clusters. Appendix A, Table IV.4
describes planning and partnership activities for Connecticut and other states which are
the focus of this section. Although Connecticut has provided support for the
development of this guidance document and for the Connecticut Hydrogen-Fuel Cell
Coalition, planning and partnership efforts for Connecticut generally lag those of other
states.
Research Centers and Support
A number of the states have significant research center activity supported by federal and
state funding for fuel cell and hydrogen research. Appendix A, Table IV.5 describes the
research and development centers and key state funding initiatives. This table identifies
only those research facilities in the state that are specifically directed at alternative energy
including fuel cells and hydrogen. Many of the other states have federally funded energy
research facilities that provide a support infrastructure for hydrogen and fuel cell
66 The report is available at the Fuel Cells 2000 website (www.fuelcells.org).
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development. For example, South Carolina was able to establish a federally sponsored
National Fuel Cell Center with limited state industry, and modest state funding.
Research support from universities is an important factor in state involvement with fuel
cells. In Connecticut, the CGFCC at the University of Connecticut (UConn) undertakes
scientific research and technology development. Naugatuck Valley Community College
has a training and certification program for fuel cell technicians. California universities
with fuel cell involvement include University of California Campuses at Berkeley, Davis
and Irvine. In Ohio, Case Western Reserve University has long been a leader in fuel cell
research activity. These are just some of the universities involved.
State Assistance for Stationary Fuel Cells
Appendix A, Table IV.6 identifies state assistance for stationary fuel cells. The first three
columns address regulatory programs, which can impede or support stationary fuel cell
installations. These programs include renewable portfolio standards (RPS) for electric
generation. In Connecticut, “Class I renewable energy source” means energy derived
from solar power, wind power, a fuel cell, methane gas from landfills, and other sources
as defined in Connecticut General Statutes.67 Other states consider fuel cells as
renewable energy only if they use a renewable fuel. Interconnection standards deal with
requirements for connecting to the utility network. In the past, without standards, utility
companies could impose burdensome and sometimes costly requirements that deterred
installation of fuel cells or other distributed generation. With establishment of standards,
this impediment is reduced. Net metering regulations require each electric supplier or
any electric distribution company providing standard offer, transitional standard offer,
standard service or back-up electric generation service to give a credit for any electricity
generated by a residential customer from a Class I renewable energy source or a
67 Connecticut General Statutes, Sec. 16-1. Definitions
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hydropower facility.68 Unlike some other states, Connecticut has a net metering law that
will help to facilitate the development of distributed generation.
Manufacturing incentives are financial incentives designed to encourage the relocation or
establishment of advanced energy companies in the state.
Incentives for the purchase of renewable energy or renewable energy equipment along
with self generation incentives are methods to encourage use of distributed power and
alternative energy generation by improving economic competitiveness. Connecticut
recently established a program that provides a one-time subsidy of $450/kW (and
$500/kW if the distributed resource is sited in southwest CT) for capital costs associated
with projects for customer-side distributed resources. In addition, Connecticut has
established “Project 100”, a program designed to encourage and fund the development of
100 MW of renewable generation.
All the states considered have demonstration programs for distributed generation
including fuel cells. California, New York and Connecticut’s programs are more
aggressive than those in the other states.
The number of stationary fuel cell installations in Table II.5 reflects these state assistance
efforts.
State Assistance for Hydrogen-Fueled Vehicles
Appendix A, Table IV.7 shows state assistance for hydrogen fueled vehicles. Hydrogen
infrastructure support is dominated by California’s Hydrogen Highway program, which
couples a requirement on vehicle manufacturers to meet targets for alternative fueled
68 Connecticut General Statutes, Sec. 16-243h. Credit to residential customers who generate electricity; metering.
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vehicles. Government vehicle purchase requirements and other incentives for private
purchase of these vehicles to make California the clear leading state in regard to
alternative fueled vehicles including hydrogen vehicles. That lead is reflected in the
number of hydrogen fueling stations in Table II.5. Florida and New York are other states
which have assistance noted, but they are at a very low level compared to those in
California. Connecticut has very little assistance available for hydrogen fueled vehicles
which is in sharp contrast to the situation for stationary power applications.
Hydrogen and Fuel Cells in Transportation
Transportation is a major component of the economy. Over 231 million vehicles were
registered in the U.S. in 2003 with 136 million of these being cars, 95 million being
trucks and 777 thousand being buses. New vehicle sales are significant with over 17
million vehicles sold in 2003, most of which were cars and light duty trucks.
Transportation is the primary use of petroleum with the United States consuming 140
billion gallons of gasoline and 44 billion gallons of diesel fuel annually.69 Imports
constitute approximately 55 percent of the petroleum consumed in the U.S.70
Consequently, transportation is a major contributor to the U.S. greenhouse gas and other
emissions and to the balance of payments deficit.
Transportation is also a significant infrastructure component with nearly 4 million miles
of streets and highways in the U.S.71 served by approximately 180,000 retail service
stations.72
Transportation is a huge market for equipment and energy. If the 17 million vehicles sold
annually each had a 75 kW power plant (a conservative estimate), total power delivered
with these vehicles would be 1,275 million kW which exceeds the total installed U.S.
electric generating capacity of 968 million kW. The business opportunity associated with
69 Energy Information Administration, 2005 Data70 Energy Information Administration, 2003 Data71 2006 Statistical Abstract72 American Petroleum Institute
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supplying fuel for transportation is also huge. International opportunities add to the
opportunity in the U.S.
Advances in performance and cost of proton exchange membrane fuel cells and reliability
and endurance demonstrations of other types of fuel cells used in stationary applications
caused hydrogen-fueled fuel cells to be considered seriously for development for vehicle
use. These technical achievements coupled with increased concern for energy imports,
noise from diesel buses in urban areas, emissions of controlled pollutants and greenhouse
gas production provide investor and government incentive to pursue the technology.
These programs address key issues associated with achieving success including:
hydrogen production cost and efficiency;
hydrogen transportation and storage size, cost, and efficiency;
developing a hydrogen fuel infrastructure; and
fuel cell operability and cost.
In addition to the risks associated with developing hydrogen fueled transportation itself,
investors and governments also face risks associated with development of alternative
transportation technologies which could reduce the benefits associated with hydrogen
fueled transportation. These alternative technologies include:
advances in performance of conventional internal combustion engine technology;
hybrid vehicles;
natural gas vehicles; and
biofuels such as ethanol and bio-diesel.
A review of the U.S. government program to advance the technology by a committee of
the National Research Council73 stated that:
“This is a broad, very challenging research effort … that will enable the vision of
a clean and sustainable transportation energy future;
73 Review of the FreedomCAR and Fuel Partnership, First Report by Committee on Review of the FreedomCAR and Fuel Cell Research Program, Phase 1 of the National Research Council of the National Academies, 2005
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Research goals have been established … that, if attained, promise to overcome the
multiple high-risk barriers to achieving that vision;
The committee believes that research in support of this vision is justified by the
potentially enormous beneficial impact for the nation; and
Funding levels and the consequent research results during the next few years
should allow future reviews to make a more firmly based assessment.”
A summary of the research and development challenges, alternative technologies and the
efforts to overcome them is contained in a report prepared by The Connecticut Academy
of Science and Engineering (CASE) for the Connecticut Department of Transportation
(DOT).74 The report also identifies organizations and individuals who are interested
parties in regard to the use of hydrogen in Connecticut and describes their concerns as
well as suggested efforts to address the concerns.
The advent of hydrogen-fueled transportation will have the following effects on
Connecticut:
a business opportunity for Connecticut companies;
development of legislation and regulations for transportation use of hydrogen;
development of hydrogen fuel infrastructure in Connecticut; and
competition from other states.
These effects are also discussed in the CASE report and they are summarized below.
Business Opportunity for Connecticut Companies
Connecticut companies described elsewhere in this document are involved with
development of products and services for hydrogen fueled transportation. These products
include: fuel cell power plants for use in automobiles and buses, electrolysis systems to
convert electricity to hydrogen fuel and the infrastructure business of producing and
delivering hydrogen for transportation use. These companies are participating in
74 CASE, “Preparing for the Hydrogen Economy: Transportation”, June 2006
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demonstrations of their product technology that are sponsored by technology developed
and produced by Connecticut companies. This technology could be used to convert
natural gas or petroleum fuels to hydrogen and a Connecticut company is developing a
fuel cell that produces hydrogen as a co-product along with electricity and heat.
Most of the global auto companies have activity in hydrogen fuel cell powered vehicles.
Currently General Motors, Honda and Toyota have internal programs to develop
hydrogen fuel cell powered automobiles, and Ford and DaimlerChrysler use fuel cells
from Ballard, a Canadian company in their vehicles. A Connecticut company, UTC
Power, has fuel cells in Honda, Nissan and BMW vehicles. Many hydrogen fuel cell
buses are manufactured by DaimlerChrysler and use Ballard fuel cell power plants. UTC
Power also has its fuel cell power plants in buses manufactured by U.S. and European
Companies. Hydrogenics, another Canadian company, has fuel cells in buses as well.
The U.S. DOE has four fuel cell automobile demonstration programs with auto company
and oil company partnerships. The teams are DaimlerChrysler/British Petroleum,
Ford/British Petroleum, General Motors/Shell and Hyundai/Chevron. UTC Power is a
member of the Hyundai/Chevron team and Ballard participates with both Ford and
DamilerChrysler. GM uses a fuel cell developed in part at its facilities at Honeoye Falls,
New York.
Proton Energy Systems, a Connecticut company, is one of the leading electrolysis
manufacturers for industrial, utility and research applications and its electrolysis systems
are involved with a number of the hydrogen filling stations in California and Vermont.
Hydrogenics, a Canadian company is a competitor for this electrolysis business.
Praxair is an industrial gas company that generates hydrogen and distributes it by
compressed gas and liquid hydrogen tanker trucks and by compressed gas hydrogen
pipelines. Praxair is involved with a number of fueling station demonstration sites in
California. Air Products is the other U.S. industrial gas company involved with hydrogen
fueled vehicle demonstrations, and British Oxygen, Linde and Air Liquide are European
competitors in the hydrogen business.
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Development of Legislation and Regulations Associated with the Use of Hydrogen
Use of hydrogen is well established in the industrial environment and appropriate codes
and standards are in place. Substantial experience with natural gas vehicles and filling
stations also contributes to the basis for developing standards, codes and regulations for
use of hydrogen in transportation. Significant effort is underway to develop national and
international standards governing use of hydrogen as a transportation fuel. The CASE
report, referenced above, has a comprehensive listing of standards activity associated
with hydrogen and a U.S. DOE website (www.fuelcellstandards.com) provides the latest
status on the standards activity. The Connecticut Fire Academy offers a training module
for fires involving industrial hydrogen, and Connecticut codes and standards are updated
regularly to reflect changes to national and international codes and standards as discussed
in the CASE report.
Connecticut has significant legislation and state-sponsored effort in support of stationary
fuel cells; however, little effort or planning is in place in regard to transportation
applications of hydrogen and fuel cells as discussed in the CASE report.
Hydrogen Infrastructure in Connecticut
Hydrogen infrastructure in Connecticut is limited to storage facilities for industrial use of
hydrogen and experimental facilities at fuel cell and hydrogen companies. Proton Energy
Systems tested a demonstration filling station prior to its being delivered to a Vermont
demonstration site, and UTC Power has a filling station for use with its experimental fuel
cell vehicles. The UTC Power station will also be used for a bus demonstration planned
for 2007 by Connecticut Transit.
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Connecticut’s infrastructure requirements are indicated by the following statistics for
transportation in Connecticut which were provided in the CASE report:
Connecticut has nearly three million vehicles that include over two million
automobiles. In addition to vehicles registered in Connecticut, the infrastructure
must serve vehicles crossing state borders. Over 350,000 vehicles cross the state
border each day and it is estimated that nearly 43,000 of these are vehicles
traversing the state between New York, Massachusetts and/or Rhode Island.
Eighty one thousand vehicles in Connecticut are associated with 858 fleets of
more than 25 vehicles each. Of these fleets, 91 have one hundred or more
vehicles.
State fleets include 4,200 automobiles or vans. Connecticut Transit and other
transit agencies that receive state support have 650 full-size buses and more than
450 smaller buses and vans. There are over 300 vans in the Ride Share program
for which the state provides purchase funding reimbursed over time by the riders.
Connecticut has approximately 21,000 miles of streets and highways, including
approximately 3,70075 miles that are maintained by the state, that are served by
more than 1,000 retail filling stations. Twenty-three of these stations are located
in service plazas along the Merritt and Wilbur Cross Highways and Interstates 95
and 395. Another 500 stations are estimated to be for private use in fleet filling
stations. All these stations deliver 1.4 billion gallons of gasoline76 and over 300
million gallons of diesel fuel per year.77
The best early use of hydrogen for transportation would likely be in state-owned fleets
used in urban areas like buses because their environmental benefits would have highest
value in these locations and because fleet operations would minimize infrastructure 75 Connecticut Department of Transportation; Bureau of Policy and Planning – Policy and Systems Information, as of Dec. 31, 200476 CASE, “Preparing for the Hydrogen Economy: Transportation”, June 200677 Energy Information Administration
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requirements. Use of hydrogen fuel cell power would reduce noise and pollution from
buses in congested urban areas. After pioneering the application with buses, other fleets
with high use in urban areas could be targeted. At the same time, strategic sites to make
hydrogen available for vehicles crossing the state could be located near the interstates in
Connecticut, including I-95, I-395, I-91, and I-84. Diffusion of the infrastructure to
additional sites would then follow as the fleet of hydrogen fueled vehicles increases in
number. It has been proposed that sales of vehicles be concentrated in a few areas to
provide economic use of hydrogen filling stations during the build out of these vehicles.
Further, it is suggested that opening fleet fueling sites (including state owned sites) to
retail sales be considered as part of the transition to a mature business.
Competition from Other States
Other states are much more active in hydrogen fueled transportation than Connecticut.
This puts Connecticut companies pursuing this opportunity at a disadvantage because
they have to rely on demonstration efforts located some distance away to contribute to
product development. Distance increases the cost of demonstration efforts and degrades
the information obtained from those efforts. These other states also gain early experience
which will help them realize the benefits of hydrogen fueled transportation more quickly
because their codes and regulations will be in place and state personnel will be familiar
with hydrogen issues. Currently, California and Michigan have the largest efforts in
demonstrating hydrogen vehicles with California’s effort being much larger. A few other
states, including New York also have hydrogen vehicle demonstrations at a lesser level.
It should be noted that New York and Michigan probably have the largest number of
hydrogen and fuel cell employees other than Connecticut, with New York probably equal
to or larger than Connecticut in this regard.
States without companies involved in hydrogen-fueled transportation also have economic
development efforts associated with protecting auto industry employment in their states.
Ohio and Michigan are examples of these states and they have research funding,
commercialization funding and educational infrastructure efforts directed at the economic
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development objective. Ohio has a long-standing activity for university research at Case-
Western Reserve University as well as a number of smaller fuel cell and materials
companies. Michigan has a company, Energy Conversion Devices, which is involved
with hydrogen storage, a key factor in making hydrogen-fueled vehicles practical.
Other states concentrate on research centered around federal laboratory facilities and/or
universities. South Carolina is an example of a state with no hydrogen or fuel cell
industry, which has built on the capability at the University of South Carolina and federal
research at the Savannah River National Laboratory to win a National Science
Foundation award for the Industry/University Cooperative Research Center on Fuel Cells
at University of South Carolina.
Pennsylvania has strength in fuel cells and hydrogen through location of Air Products, an
industrial gas company active in hydrogen, Siemens, a company active in solid oxide fuel
cells, and in a fuel cell test center at Concurrent Technologies Corporation.
Research and Development
In 2003, President Bush announced a $1.2 billion Hydrogen Fuel Initiative, which
included $159 million in FY04 and $227 million in FY05, and proposed expenditures for
FY06 and FY07 projected to be approximately $243 and $290 million dollars,
respectively. The Hydrogen Fuel Initiative also includes approximately $720 million in
federally-sponsored R&D funding through the Department of Energy.78 As stated
previously, global expenditures for R&D exceeded $795 million in 2005.
Figure II.1 – U. S. DOE Hydrogen Technology Budget Request Program Areas (FY05) 79
78 U.S. Department of Energy, http://www.hydrogen.energy.gov79 U.S. Department of Energy, An Integrated Research, Development, and Demonstration Plan, February 2004
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Connecticut Global Fuel Cell Center - Research Capabilities
As detailed above, the global market in fuel cell technology continues to grow, and is
projected to be a multi-billion dollar industry. However, to some extent, the industry is
still in the early stages of development in certain market sectors, and major barriers to
product development remain. In particular, fuel cell scientific research and technology
development progress has not been linked to integrated product development processes,
and limitations in the supporting technical, human, and commercial infrastructure have
resulted in serious problems with product cost and durability. Several national studies of
the state of the art reflect the need to address cross-cutting challenges.80,81,82,83 According
to the U. S. DOE Report to Congress, “Proving full performance and reliability of fuel
cell systems over the required life in field applications is a prerequisite for all
applications.”84
Recognizing the need for fuel cell scientific research and technology development, the
CGFCC was established at UConn in 2001. Over 40 faculty and 60 students are
conducting contract research on fuel cell science and related technologies at the
CGFCC’s dedicated 16,000-ft2 facility. Six $1 million faculty chairs have been allocated
80 National Hydrogen Energy Roadmap, United States Department of Energy, November 2002.81Fuel Cells for Transportation, United States Department of Energy, March 2002. 82 Engineering and Public Policy, Committee on Science, On Being a Scientist: Responsible Conduct in Research, National Academy Press, 1995.83 U.S. Department of Energy’s Hydrogen Future; http://www.eere.energy.gov/hydrogenandfuelcelsl/fuelcells/why.html. 84 Fuel Cell Report to Congress, Department of Energy, ESECS EE-1973, Feb. 2003.
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to the CGFCC, anchored in part by an investment of the Connecticut Clean Energy Fund.
The contract research program for the CGFCC in 2005 served 21 clients. In spring 2004,
the CGFCC proposed to the American Society of Mechanical Engineers (ASME), the
creation of the International Journal of Fuel Cell Science and Technology; now fully
operational, this is the nation’s first archival engineering journal exclusively serving the
fuel cell engineering community. Through these efforts and, especially through
interactions with industry, UConn faculty has identified the need to focus on the systems
that can benefit from the incorporation of fuel cells, fully integrated from the electrical,
thermal, mechanical, chemical, and geometrical standpoints.
Fuel cell research has been conducted at UConn for over 20 years, led by groups in
polymers, catalysts, nanostructured materials, hydrogen storage, and
transport/conduction. In the last three years, the $15 million investment in fuel cell
engineering and science at UConn has created a strong base for contract research on a full
range of nano- to systems-level topics associated with PEM fuel cells, direct methanol
fuel cells DMFCs, and SOFCs.85
85 Connecticut Global Fuel Cell Center
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PART III
Assessment of the Economic Potential for Connecticut
Knowledge of the full supply chain will potentially increase the value of the industry
through increased efficiency, reduced waste, and improved integration of manufacturing
components. As part of the Final Plan a full supply chain analysis is anticipated.
In terms of economic value, legislative decisions to support the hydrogen and fuel cell
industry are appropriate because the hydrogen and fuel cell industry is a key industry that
contributes to the economy of the State of Connecticut, as discussed below.
Economic Impacts of Connecticut’s Hydrogen and Fuel Cell Industry
In 2006, Connecticut’s hydrogen and fuel cell industry consists of six OEMs employing a
total of 927 employees, as detailed in the following table:
Table III.1 - Employment for the Hydrogen and Fuel Cell Industry in Connecticut
Company86 Current EmployeesAvalence, LLC —
FuelCell Energy, LLC —GenCell Corporation —
Infinity Fuel Cell and Hydrogen, Inc. —Proton Energy Systems —
UTC Fuel Cells —TOTAL 927
The economic impact of the industry on Connecticut’s economy is presented in the following table.
86 Data for each company may be considered proprietary.
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Table III.2 - Economic Impacts of CT Hydrogen and Fuel Cell Industry87,88
Industry Revenues($MM) Employment
Employee Compensation
($MM)Direct Impacts 204.36 927 76.47
Indirect Impacts 89.21 489 28.99Induced Impacts 82.22 732 26.04
Total Impacts 375.79 2,148 131.05Multiplier 1.84 2.31 1.72
It is estimated that the hydrogen and fuel cell industry received just over $204 million in
revenues. The indirect and induced impacts amounted to an additional $171.4 million
within the state. The revenue multiplier is 1.84, indicating that for each dollar of revenue
generated by the hydrogen and fuel cell industry, an additional 84 cents of revenue is
received by Connecticut businesses through indirect and induced impacts.
The employment multiplier is estimated at 2.31. Each job in the hydrogen and fuel cell
industry supports an additional 1.31 jobs elsewhere in Connecticut’s economy. Indirect
jobs are those in the supply chain for the industry where 489 jobs are supported and an
additional 732 jobs are supported through induced effects for a total employment impact
of 2,148 jobs.
Employers within the hydrogen and fuel cell industry pay approximately $76.5 million in
employee compensation annually. As a consequence, indirect and induced impacts
amounted to an additional $55 million in compensation paid by other employers. The
compensation multiplier of 1.72 indicates that for every $1.00 paid to employees within
the hydrogen and fuel cell industry, an additional 72 cents is paid by other employers.
The analysis conducted for this report made exclusive use of the IMPLAN input-output
model. This model estimates total local economic activity generated as a result of the 87 Analysis provided by Mark A. Thompson, PhD, Dean School of Business - Quinnipiac University. The data used to estimate the economic impacts of the hydrogen and fuel cell industry were provided by the Connecticut Center for Advanced Technology, Inc.88 Refer to the following page for an explanation of direct, indirect and induced effects.
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economic activity of a particular business or industry sector. A business or industry
requires inputs, some of which are purchased from other businesses within the area. The
purchase of inputs causes additional economic activity. IMPLAN furnishes estimates of
the overall economic activity. The model also provides estimates of a chain reaction of
economic activity.
The concepts of direct, indirect and induced impacts are considered in this analysis.
Direct impacts are those related to the initial economic stimulus. In this case, direct
impacts are derived from the revenues received by the industry. Indirect impacts are
those associated with the succeeding rounds of purchases through the supply chain.
When a fuel cell company purchases an input, its supplier must in turn purchase inputs to
fulfill the request. In turn, the supplier’s supplier must make purchases and so on.
Induced impacts are the regional household spending patterns that occur as the result of
direct and indirect impacts. For example, the employment and income generated by
direct and indirect impacts allows for spending in restaurants and retail outlets.
Economic impacts are assessed through multipliers. Multipliers reflect the magnitude of
the impact on a regional economy resulting from a locally produced good or service. The
production of a good by one business requires increased production on the part of
businesses that supply inputs, which in turn stimulates other business. Ultimately,
regional income and employment increase, stimulating more activity. The multipliers
used for this study are related to the State of Connecticut’s economy and its unique
economic structure and trade flows. As a result, the multipliers in this study may be
smaller or larger than those in other studies of the same industry.
The table of economic impacts of the hydrogen and fuel cell industry reveal the estimated
direct, indirect and induced impacts on Connecticut’s economy. The impacts are
measured in three ways:
1. The first measure is the impact of industry revenue. This is equal to total industry
sales plus what is placed in inventory.
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2. The second measure is employment. This is the full and part-time employment
associated with the industry and through various economic impacts.
3. The third measure is employee compensation. This measures total payroll
including wages, salaries and the monetary value of benefits.
Economic indices developed in conjunction with the hydrogen and fuel cell industry,
with assistance from DECD suggest that the hydrogen and fuel cell industry can be an
emerging economic cluster. As previously identified, the hydrogen and fuel cell industry
currently contributes to the State’s economy by providing over 900 jobs associated with
research and development, and the manufacture of equipment; approximately $29 million
annually in State tax revenue; approximately $2 million annually in local tax revenue;
and over $340 million annually in Gross State Product.
Global growth is encouraging suggesting that the market drivers, functional values, and
economic values are being recognized and the market is growing. Nonetheless, these
market drivers, functional values, and economic values have not yet been sufficient to
fully replace the use of larger conventional base load technology on the grid and some
lower cost distributed generation technology. The barriers that have slowed market
penetration of hydrogen and fuel cell technology includes high initial costs with non-
internalized and unappreciated environmental values, cost consuming interconnections,
complicated codes and standards, lack of adequate public awareness, investment needed
to undertake advanced research and development, lack of continuous (large scale)
automated production, and strong competition from rate base supported grid generation
load that could view distributed generation as a disruptive technology. With cost as the
major barrier, critical questions raised and answered here are:
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Is there a global market sufficient to justify investment by Connecticut?
Yes. With a 13 percent share of a global market that includes $353 million in annual
sales and $796 million in annual R&D investment, Connecticut now occupies a favorable
position to maintain and expand this share for increased employment and gross product.
However, some estimate that the market will grow substantially, and revenues are
expected to generate between $18.6 billion annually and nearly $35 billion annually over
the next decade as hydrogen and fuel cell technology takes a larger share of the stationary
power, portable power, and transportation markets.89 With a potential market of this size,
Connecticut would be in an enviable position for substantial opportunities to increase
employment, sales, revenue, and investment in R&D.
Can Connecticut companies capture a larger share of the global market?
While the question of how to increase Connecticut’s share of the global sales, R&D and
employment market will be the focus of the Final Report, there are no technical barriers
that would preclude Connecticut companies from increasing their share of the global
market. The fuel cell and hydrogen industry will need to grow within the same business
climate that all industries face in Connecticut. Moreover, if Connecticut does not
actively and aggressively seek to increase its share, it may face loss of sales, R&D
expenditures and employment as other states and countries compete for fuel cell and
hydrogen development activities.
Can costs drop to a level that will provide for effective competition and increased
market penetration?
Yes. It has been estimated that with increased support for research and development, and
if production were to increase, production costs could drop to levels closer to parity with
conventional generation.
89 Connecticut Department of Economic and Community Development
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CA
PITA
L C
OST
$/K
W
NotCommercially
Viable
CommerciallyViable
Cumulative Volume of Fuel Cells Manufactured
A
B
GenCell CostReduction
A - DFM/CM is critical first stepB- Economy via volume and learning curve follow
Preliminary Plan
Will costs decrease if production were to increase?
Yes. It has been estimated that increased production could provide continuous
manufacturing of fuel cells that will help to support research, testing, and deployment of
hydrogen and fuel cell technology and achieve lower unit costs to effectively compete
with traditional generation technologies.
Figure III.1 – Example: GenCell Fuel Cell Cost vs. Production Volume
Will supportive measures to be applied to increase market penetration be economically
justified to earn a favorable return on public investment?
Yes. With appropriate support, to be determined by the Final Report, production could
increase, unit costs will drop, and employment will increase. With favorable multipliers
of 2.31 for employment, 1.84 for industrial revenues, and 1.72 for employee
compensation, Connecticut is well positioned to invest in the hydrogen fuel cell industry
with the potential for substantial indirect and induced effects.
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Are there favorable locations for deployment and investment in Connecticut for
hydrogen and fuel cell technology?
Yes. Connecticut would benefit substantially through R&D investment and deployment
of hydrogen and fuel cell technology. Benefits would include advanced training and
education for long-term support of industry needs; improved environmental performance
and cleaner air in the state; improved reliability for the electric grid; and reduced costs for
electric consumers. All of these values will help to create new jobs that are directly and
indirectly associated with hydrogen and fuel cell technology.
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PRELIMINARY CONCLUSION
Based on this analysis, support from the State of Connecticut to facilitate the targeted
development of hydrogen and fuel cell technology is well justified for functional and
economic reasons. Support of R&D and the targeted development of fuel cell
applications will increase employment, improve energy reliability, enhance
environmental quality, and help to reduce energy costs. The implementation of strategies
must be dedicated over a long-term schedule. Inaction by Connecticut in addressing this
opportunity may result in the erosion of the industry in state, loss of valuable jobs directly
associated with the industry and the supply chain, and loss of a chance to synchronize an
economic development strategy with the functional improvement of the energy supply
infrastructure of the state. Favorable sites for the development of stationary
power/distributed generation with fuel cells includes sites that require premium power,
reliable power, and/or combined heat and power, and sites that will support the electric
grid. These sites have the potential for hundreds of MWs of load; 85 MW have been
identified as high value opportunities for fuel cell and hydrogen applications. Although
the potential number of vehicles and refueling stations has not been estimated for this
Preliminary Plan, deployment will be estimated for the final plan based on potential
partnerships and targeted strategies aimed at fleets, transit buses, and urban refueling
centers. Portable power applications have also not been estimated; however, commercial
and military applications will be investigated for the final plan.
Future activities, consistent with Public Act 06-187, will include the development of
strategies and an action plan for implementation.
Attention will be given to identify targeted applications to increase reliability and
security, provide necessary voltage control and grid security, provide specialized and
premium power for required uninterruptible service at customer sites, promote the
improved efficiency and environmental performance with reduced emissions and
greenhouse gases, and to provide more efficient use of nonrenewable fuels and increased
use of renewable and sustainable fuels.
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Appendix A: Tables
Table IV.1 - Example Fuel Cell and Hydrogen Companies in MassachusettsState Company Product(s)/Technology(ies) Application(s) StatusMA.
Acumentrics Corporationwww.acumentrics.com
Solid Oxide Fuel Cells Small natural gas or propane fueled power generation
5 kW demonstrations
Analytic Powerwww.analytic-power.com/
Proton Exchange Membrane and Solid Oxide Fuel Cells
Research and Development for clients
Continuing Research and Development Activity
Electrochem, Inc.www.fuelcell.com
Proton Exchange Membrane Fuel Cells
Small Fuel Cell components.Contract Research
Components available, research activity underway
Giner, Inc. and Giner Electrochemical Systems, LLCwww.ginerinc.com
Proton Exchange Membrane Fuel Cells and Electrolysis Systems
Research and Development for Clients
Continuing research and development activity
Nuverawww.nuvera.com
PEM Fuel Cells and Hydrogen Generation from Natural Gas and Petroleum
Back-up power,Auto power, Bus PowerRail power
Demonstrations
Protonex Technology Corporationwww.protonex.com
Proton Exchange Membrane Fuel Cells
Portable Applications Demonstrations
ZTEKwww.ztekcorporation.com
Solid Oxide Fuel Cells,Steam reforming systems
Stationary power including combined cycle systems
Demonstrations
Table IV.2 - Example Fuel Cell and Hydrogen Companies in New York
State Company Product(s)/Technology(ies) Application(s) Status
New York
BAE Systemswww.na.baesystems.com
Drive System Integration Bus OEMs DemonstrationHybrid Bus Drives
Corningwww.corning.com
Solid Oxide Fuel Cell Stacks OEMs Research and Development
ENrG Incwww.enrg-inc.com
Solid Oxide Fuel Cell Components OEMs Research and Development
General Electricwww.ge.com/research
Solid Oxide Fuel Cells Large Central Stations with coal gasifier and bottoming cycle
6kW Stack OperationSee October 12, 2006 Press Release
Integration of fuel cells and buses Buses New ProgramSee October 23, 2006 Press Release
Hydrogen Programs Electrolysis, carbon capture and sequestration, storage
Research effort at Global Research
General Motors www.gm.com/company/gmability/adv_tech/400_fcv/index.html
PEM fuel cells Automobiles, Military, Stationary
In demonstration vehicles
MTI Micro Fuel Cells Incwww.mtimicrofuelcells.com
Direct Methanol Fuel Cell (DMFC)
Portable electronics—commercial and military
Prototype delivered for customer evaluationFuel Distribution Partnership
Plug Powerhttp://www.plugpower.com
Proton Exchange Membrane Fuel CellsHome fuelers for hydrogen vehicles
Hydrogen Fueled Back-up power,Small Stationary Power with natural gas or propane,Home hydrogen refuelers for fuel cell vehicles
Many demonstrations, strategic partnerships in place
Table IV.3.1 - Example Fuel Cell and Hydrogen Companies in Other States
State Company Product(s)/Technology(ies) Application(s) StatusCA
Chevron Corporationwww.chevron.com
Hydrogen Fuel Vehicles Demonstrations
ISE Corporationwww.isecorp.com
Integrated drive systems for hybrid and fuel cell buses
Buses Demonstrations
Jadoo Powerwww.Jadoopower.com
Hydrogen-fueled fuel cell power plants for portable applications
Military, first responders, telecommunications
Demonstrations, products available for sale
Polyfuelwww.polyfuel.com
Hydrocarbon Membranes for Direct Methanol and Proton Exchange Membrane Fuel Cells
OEMs Demonstrations
COVersa Power Systemswww.versa-power.comNote: Partial Ownership by FuelCell Energy of CT
Solid Oxide Fuel Cells Auxiliary Power Units,Combined Cycle Power Plants
Research and Development
DEDuPontwww.dupont.com
Fuel Cell Membranes and Membrane Materials for Proton Exchange Membrane Fuel Cells and Electrolyzers
OEMs Primary Supplier of Fuel Cell Membrane Material. Major Global Materials Supplier
W. L. Gore & Associateswww.gore.com
Fuel Cell Membranes and Membrane Electrode Assemblies (MEAs) for Proton Exchange Membrane Fuel Cells and Electrolyzers
OEMs Major Supplier of Fuel Cell Membranes and MEAs, Global Supplier of Materials
Ion Power Inc.www.ion-power.com
Fuel Cell Membranes and MEA’s for Proton Exchange Membrane Fuel Cells and Electrolyzers
OEMs Research and Development
Table IV.3.2 - Example Fuel Cell and Hydrogen Companies in Other States
MIDelphiwww.delphi.com
Solid Oxide Fuel Cells Vehicles Auxiliary Power Units,Combined cycle power plants
Research and Development of fuel cells. Component supplier to the auto industry
DaimlerChryslerwww.daimlerchrysler.com
Fuel Cell Automobiles Automobiles, Buses Demonstration
Eaton Corpwww.eaton.com
Fuel Cell Ancillary Components OEMs Demonstration
Energy Conversion Devices Inc.www.ovonic.com
Hydrogen Energy Storage and Hydrogen Fuel Dispensers
Automobiles, vehicle fueling stations
Demonstrations
Ford Motor Companywww.ford.com
Fuel Cell Automobiles Automobiles Demonstration
General Motors Corporationwww.gm.com
Fuel Cell Automobiles Automobiles Demonstration
MN3Mwww.mmm.com
Membrane Electrode Assemblies for Proton Exchange Membrane Fuel Cells
OEMs Demonstrations
NJMillennium Cell Inc.www.millenniumcell.com
Hydrogen Storage in Chemical Hydrides for Portable fuel cell products
OEMs Demonstration, Relationships with Fuel Cell Companies
OhioDana Corporationwww.dana.com
Fuel Cell Stack and Balance of plant components
Fuel Cell OEMs Supplier of components to vehicle industry and others
GrafTech Internationalwww.graftech.com
Graphite Electrodes and Other Fuel Cell graphite parts
Fuel Cell OEMs Supplier of commercial graphite products
Nextech Materials, Ltd.www.nextechmaterials.com
Solid Oxide Fuel Cell Materials and Fuel Processing Catalysts
Fuel Cell and Fuel Processors
Supplier to OEMs
Rolls-Royce Fuel Cell Systems (US) Inc.www.rolls-royce.com
Solid Oxide Fuel Cells Megawatt fuel cell-turbine combined cycle power plants
Research and Development
SOFCO-EES Holdings, LLCwww.sofco-efs.com
Solid Oxide Fuel Cells and Fuel Processors
Stationary and Vehicle Auxiliary Power
Laboratory Demonstrations
UltraCell Corporationwww.ultracellpower.com (Note: California Company with production facility in Ohio)
High volume manufacturing of small reformer-Proton Exchange Membrane Fuel Cells
Portable Electronics for Commercial and Military Use
Beta Units available to customers
Table IV.3.3 - Example Fuel Cell and Hydrogen Companies in Other States
ORIdatechwww.idatech.com
Small Fuel Cell Power Plants up to 15 kW for portable power applications operating on hydrogen or hydrocarbon fuels
Military, commercial, residential applications
Demonstrations
PAAir Productswww.airproducts.com
Global Industrial Gas Company Hydrogen Fueling Stations for Vehicles
Demonstrations in US and Europe
Franklin Fuel Cellswww.franklinfuelcells.com
Solid Oxide Fuel Cells Range of power from kilowatts to hundreds of kilowatts
Research and Development
Siemens (US Fuel Cell Activity)www.siemens.com
Solid Oxide Fuel Cells Fuel Cells and Fuel Cell-Turbine Combined Cycle power plants
A number of Demonstrations
UTCeramatec Inc.www.ceramatec.com
Solid Oxide Fuel Cells Research and Development
Advanced technology materials for fuel cell and other applications.
VAH2 Gen Innovations Inc.www.h2gen.com
Natural gas to hydrogen generators Industrial Hydrogen and Hydrogen for Vehicles
Commercial products
WAHydrogen Power Inc.www.hydrogenpowerinc.com
Hydrogen Storage based on reaction of water and aluminum
Military and commercial portable power, vehicles
Demonstration
Relionwww.Relion-inc.com
Hydrogen-fueled fuel cell power plants for back-up applications
Military, telecommunications, commercial
Demonstrations, Certified Products available
Table IV.4 - Planning Documents and Partnerships for Key StatesState Planning Partnerships
California California Hydrogen Highway Network Plan (2004)Alternative Transportation Fuel Plan (2005)Executive Order S-06-06 Use of Alternative Fuels (2006)
California Fuel Cell Partnership (1999)California Hydrogen Business CouncilCalifornia Stationary Fuel Cell Collaborative
Florida H2 Florida (2003) The Florida Hydrogen Business Partnership (2004)Florida Hydrogen Initiative, Inc.
Massachusetts Legislative Action Requested by Industry (2006) Massachusetts Hydrogen Coalition (2004)
Michigan Fuel Cell Report
New York New York State Hydrogen Energy Roadmap (2005) New York State Fuel Cell Network (2005)
Ohio Ohio Fuel Cell Initiative (2002)Ohio Fuel Cell Roadmap
Ohio Fuel Cell Coalition Wright Fuel Cell Group (2004)
Pennsylvania Pennsylvania Hydrogen and Fuel Cell Consortium
South Carolina SC H2—The South Carolina Hydrogen Economy, Capitalizing on the States R&D Assets (2005)
Engenuity SCSouth Carolina Hydrogen and Fuel Cell AllianceSouth Carolina Hydrogen Coalition (2002)South Carolina Next Energy InitiativeUSC Columbia Fuel Cell Collaborative (2005)Cluster Forming
Connecticut Hydrogen and Fuel Cell Planning Effort Begins (2006) Connecticut Hydrogen and Fuel Cell Coalition (2005)Cluster Formation (2007)
Table IV.5 - Research Support for Hydrogen and Fuel Cells in Key States
State Research and Development Centers State Funding for research and DevelopmentCalifornia National Fuel Cell Research Center at UCAL Irvine
Institute for Transportation Studies at UCAL DavisCalifornia Energy CommissionClean Energy Funding
Florida -- --
Massachusetts -- Massachusetts Technology Collaborative
Michigan NextEnergy CenterMichigan Alternative and Renewable Energy CenterCenter for Fuel Cell System and Power Integration
Michigan NextEnergy AuthorityNextEnergyEnergy Office of Michigan
New York New York State Energy Research and Development AuthorityLong Island Power AuthorityNew York Power Authority
Ohio Fuel Cell Prototyping Center Third Frontier Project
Pennsylvania Fuel Cell Test Center at Concurrent Technologies CorporationHybrid and Hydrogen Research Center at Pennsylvania State University
--
South Carolina Center for Hydrogen Research at Savannah River National LaboratoryUniversity of South Carolina National Fuel Cell CenterInternational Center for Automotive Research at Clemson UniversityJames E. Clyburn Transportation Center at South Carolina State University
--
Connecticut Connecticut Global Fuel Cell Center Connecticut Innovations, Inc.Connecticut Clean Energy FundNew Energy Technology Grants
State Renew. Portfolio Standard
Interconnect Standard
NetMeter
Mftr Inct.
Sustain. Bldg Policy
Renewable Energy
Purchase
Renew. PurchIncent
Self Generation Incentives
Back-up Power Rate Relief
Demo Funding
California Renewable Fuel Only
Yes Yes San Diego San Francisco(Bonding)
Yes Yes Yes
Florida Yes YesMassachusetts Renewable
Fuel OnlyYes Yes
<60 kWYes Yes Yes
Michigan Yes Yes<30 kW
Yes Yes Yes
New York Yes Yes Yes Yes Yes YesOhio Yes Yes Yes Yes YesPennsylvania Yes Yes Yes Yes Yes YesSouth CarolinaConnecticut Yes Yes Yes Yes, State
FacilitiesYes Yes Yes
Table IV.6 - State Assistance for Stationary Fuel Cells
State Hydrogen Infrastructure Support
AFV Sales Rqmt
Government Purchase of AFV
ZEV Bus Purchase Requirement
Vehicle/Fuel Purchase Incentive
HOV/Parking Incentives for AFV
Manufact’rIncentives
Demonstrations
California Yes Yes Yes Yes Yes Yes YesFlorida Yes Yes Yes Yes YesMassachusetts
Yes Yes
Michigan Yes YesNew York Yes Yes Yes Yes YesOhio Yes YesPennsylvania Yes Yes Yes YesSouth CarolinaConnecticut Yes Yes
Table IV.7 - State Assistance for Hydrogen Fueled Vehicles
Appendix B: High Value Opportunities for Fuel Cell & Hydrogen Applications
As an exercise to identify the technical potential and strategic targets for Connecticut, CCAT
has assessed and analyzed potential applications for stationary power/distributed generation
and transportation. These strategic targets include commercial buildings with potentially high
electricity consumption (inpatient healthcare, education, lodging, food sales, food service,
and public order and safety), selected town and state buildings, energy intensive industries,
telecommunications facilities, selected public works facilities, alternative fueling stations, and
state fuel dispensing locations. These targeted applications have been estimated at
approximately 85 MW.
The development of fuel cells and hydrogen equipment is appropriate, and the application of
this technology is well justified at strategic locations throughout the state for the following
reasons:
fuel cells are extremely efficient and can help to reduce the dependence on foreign oil,
and contribute greatly to the reduction of air pollutants, especially SO2, NOx, and
VOC;
fuel cells have a high availability rate and can provide premium, stand-by, and
emergency power for a variety of applications;
fuel cells provide renewable energy for compliance with renewable portfolio
standards, and the Governor’s directive for state building renewable energy purchases;
and
fuel cells and hydrogen equipment are developed and manufactured in the state
providing direct benefits including high-skilled and high-paying jobs, and indirect
benefits associated with the supply chain.
Potential Fuel Cell Installations
Commercial Building Types with Potentially High Electricity Consumption Commercial building types with potentially high electricity consumption have been identified
as potential locations for on-site generation and combined heat and power systems based on
data from the EIA’s Commercial Buildings Energy Consumption Surveys (CBECS). These
commercial building types, as defined by the EIA, include inpatient healthcare, education,
lodging, food sales, food service, and public order and safety. These commercial building
types represent the top principal building activity classifications that reported the highest
value for electricity consumption on a per building basis.90 These commercial buildings with
potentially high electricity consumption may have high and potentially advantageous load
factors for the favorable application of CHP and advanced distributed generation
technologies, including fuel cells.
Education According to the EIA, buildings classified as “education” are those used for academic or
technical classroom instruction.91 The Connecticut State Department of Education reports that
there are approximately 38392 non-public schools and 1,031 public schools, including
magnets, charters, alternative schools and special facilities in Connecticut. Of the 1,031
public schools, 306 school facilities have had no major renovations in the past 20 years, and
260 school facilities have had major renovations or construction within the past 11-20 years.93
In addition, there are 50 colleges and universities in Connecticut, including 22 public
institutions and 28 private institutions.94 There is currently a fuel cell installed at the South
Windsor High School and Yale University.95 The fuel cells installed at the Connecticut
90EIA, Table C14. Electricity Consumption and Expenditure Intensities for Non-Mall Buildings,2003; http://www.eia.doe.gov/emeu/cbecs/cbecs2003/detailed_tables_2003/2003set10/2003pdf/c14.pdf91 Energy Information Administration, Description of CBECS Building Types; http://www.eia.doe.gov/emeu/cbecs/building_types.html92Connecticut State Department of Education; http://www.csde.state.ct.us/public/cedar/edfacts/schools_by_type.htm93 Annual Report on the Condition of Connecticut's Public School Facilities - December 2005; Section 1. http://www.csde.state.ct.us/public/dgm/ed050/reports_2005/sec1.pdf 94 Connecticut Department of Higher Education, Fall 2006 College and University Headcount in Connecticut, November 2006; http://www.ctdhe.org/info/pdfs/2006/2006Enrollment.pdf95 Connecticut Clean Energy Fund
Global Fuel Cell Center at the University of Connecticut (Storrs) are primarily laboratory
sized units for testing and evaluation.96 (See Appendix B - Figure 7: Education)
The technical potential of energy at the older 306 public schools and the 50 colleges and
universities has been estimated at approximately 12 MW of load, which could be provided by
46 to 58 fuel cell units. However, if just five percent of the 356 education buildings were
powered by current fuel cell technology, approximately 18 units could be deployed for a total
capacity of between 3.6 and 4.5 MW.
Food Sales According to the EIA, buildings classified as “food sales” are those used for retail or
wholesale of food, including grocery stores, food market, convenience stores.97 There are
over 3,000 businesses in Connecticut that may be engaged in the retail sale of food,98
including 817 food stores that have obtained a grocery store beer permit for the retail sale of
beer.99 The application of a fuel cell at a small convenience store may not be economically
viable, based on the electric demand and operational requirements. Consequently, CCAT has
identified approximately 230 larger businesses in Connecticut engaged in the retail sale of
food that have more than 25 employees at the site. There are currently no fuel cells installed
at food sales establishments in Connecticut; however, there is one fuel cell installed at the
Pepperidge Farms manufacturing facility in Bloomfield. (See Appendix B - Figure 3: Food
Sales)
The technical potential of energy at the larger 230 food stores has been estimated, using a
conservative average of load per building, at approximately seven MW of load, which could
be provided by 29 to 36 fuel cell units. However, if just five percent of the large food stores
were powered by current fuel cell technology, approximately 12 units could be deployed for a
total capacity of between 2.4 and 3 MW.
96 Connecticut Global Fuel Cell Center97 Energy Information Administration, Description of CBECS Building Types; http://www.eia.doe.gov/emeu/cbecs/building_types.html98 Proprietary market data.99 Connecticut Department of Consumer Protection, Liquor Control Division
Food Service
According to the EIA, buildings classified as “food service” are those used for the preparation
and sale of food and beverages for consumption, including restaurants, and fast food
establishments.100 There are over 6,400 businesses in Connecticut that may be classified as
food service establishments.101 Again, the application of a fuel cell at a small restaurant may
not be economically viable, based on the electric demand and operational requirements.
Consequently, CCAT has identified approximately 820 businesses in Connecticut engaged in
the preparation and sale of food and beverages for consumption that have more than 25
employees at the site. There are currently no fuel cells installed at food sales establishments
in Connecticut. (See Appendix B - Figure 2: Food Service)
The technical potential of energy at the 820 food service establishments has been estimated at
approximately 20 MW of load, which could be provided by 80 to 100 fuel cell units. If just
five percent of the 820 food service establishments were powered by current fuel cell
technology, approximately 41 units could be deployed for a total capacity of between 8.2 and
10.25 MW.
Inpatient Healthcare According to the EIA, buildings classified as “inpatient healthcare” are those buildings used
as diagnostic and treatment facilities for impatient care, including hospitals and inpatient
rehabilitation facilities, but not including convalescent homes and skilled nursing facilities.102
CCAT has identified approximately 99 inpatient healthcare facilities in Connecticut.103
Specific attention is encouraged for CHP applications to increase efficiency and reduce fuel
consumption. This application will also have special value to provide increased reliability to
mission critical facilities associated with Homeland Security and healthcare. There is
currently one fuel cell installed at Saint Francis Hospital and Medical Center in Hartford.
(See Appendix B - Figure 4: Inpatient Healthcare)
100 Energy Information Administration, Description of CBECS Building Types; http://www.eia.doe.gov/emeu/cbecs/building_types.html101 Proprietary market data.102 Energy Information Administration, Description of CBECS Building Types; http://www.eia.doe.gov/emeu/cbecs/building_types.html103 Connecticut Department of Public Health, Facilities Licensing & Investigations Section
The technical potential of energy from the 99 buildings, classified as inpatient healthcare, has
been estimated at approximately 75 MW of load. However, if each of the 99 inpatient
healthcare facilities were powered by current fuel cell technology, approximately 20 to 25
MW of electricity could be generated.
Lodging According to the EIA, buildings classified as “lodging” are those used to offer multiple
accommodations for short term and long term residents, including hotel, motels, inns,
convalescent homes, and skilled nursing facilities.104 There are approximately 690 businesses
in Connecticut that may be classified as lodging establishments.105 Again, the application of a
fuel cell at a small inn or motel may not be economically viable, based on the electric demand
and operational requirements. Consequently, CCAT has identified approximately 180
businesses in Connecticut that would be classified as lodging that have more than 25
employees at the site. In addition, there are 237 convalescent homes and skilled nursing
facilities in Connecticut.106 There are currently no fuel cells installed at lodging
establishments in Connecticut. (See Appendix B - Figure 6: Lodging)
The technical potential of energy at the larger 417 lodging establishments (larger hotels and
convalescent homes and skilled nursing facilities) has been estimated at approximately 23
MW of load, which could be provided by 92 to 115 fuel cell units. If just five percent of the
417 lodging establishments were powered by current fuel cell technology, approximately 21
units could be deployed for a total capacity of between 4.2 and 5.25 MW.
Public Order and Safety
According to the EIA, buildings classified as “public order and safety” are those buildings
used for the preservation of law and order, or public safety, including police and fire stations,
jail or penitentiary, and courthouses. There are approximately 811 facilities in Connecticut
that may be classified as public order and safety.107 However, many small towns lack a police 104 Energy Information Administration, Description of CBECS Building Types; http://www.eia.doe.gov/emeu/cbecs/building_types.html105 Proprietary market data.106 Connecticut Department of Public Health, Facilities Licensing & Investigations Section107 Proprietary market data.
or fire department that is staffed 24 hours per day, seven days a week and the application of a
fuel cell at such a facility may not be economically viable, based on the electric demand and
operational requirements. Consequently, CCAT has identified 75 state-owned facilities in
Connecticut that are used by the Connecticut State Police, state penitentiaries, state armories
and the State’s Supreme, Appellate, and Superior Courts.108 There are currently no fuel cells
installed at pubic order and safety facilities in Connecticut.109 (Appendix B - Figure 5: State
Public Order and Safety)
The technical potential of energy from the 75 buildings, classified as public order and safety
has been estimated at approximately 2MW of load. However, if each of the 75 state-owned
public order and safety facilities were powered by current fuel cell technology, approximately
15 to 18.75 MW of electricity could be generated.
These potential locations represent favorable opportunities for the application of advanced
distributed generation technologies to provide uninterrupted power during grid outages.
Policy directives at the local, State and Federal levels to provide increased reliability for
mission critical facilities associated with Homeland Security will help to support this
initiative. According to the EIA’s 1999 CBECS data, 63 percent of inpatient healthcare
facilities reported having electricity generation capability, and 54 percent reported actually
used the capability to generate electricity. Likewise, 61 percent of public order and safety
facilities also reported having electricity generation capability; however, only 32 percent
reported actually using the capability to generate electricity.110
108 It should be noted that some of these facilities have multiple buildings that may be ideal for the application of a fuel cell; however, this analysis assumes no more than one fuel cell at each location.109 Connecticut Clean Energy Fund110 EIA, Electricity Generation Capability, 1999 CBECS; http://www.eia.doe.gov/emeu/cbecs/pba99/comparegener.html
Appendix B Table V.1 – Summary of Energy Potential: Commercial Building Types with Potentially High Electricity Consumption
CategoryTotal Sites
Potential Sites
Electric Consumption Per Building (1000 KWh)111
Convert to MW (100 percent
Capacity Factor)
Potential Capacity
(MW)Education 1,464 356 283 12 4 - 5 Food Sales 3,000+ 230 276 7 2 - 3Food Service 6,400+ 820 213 20 8 - 10Inpatient Healthcare 99 99 6,628 75 20 - 25Lodging 690 417 483 23 4 - 5Public Order and Safety 811 75 237 2 15 - 19
Total: 1,997 139 53 - 67
As shown above, the analysis provided here estimates that there are approximately 2,000
potential locations identified in this analysis, within the category of commercial building
types with potentially high electricity consumption, for the application of fuel cell stationary
power applications. Assuming the demand for electricity was uniform throughout the year
and the generation resource had a capacity factor of 100 percent, approximately 556 to 695
fuel cell units with a capacity of 200 – 250 kW could be used to meet a projected load of 139
MW. However, approximately 67 MW might be a more measured expectation if existing
technology were deployed at selected sites.
Energy Intensive Industries
According to the EIA, the most energy-intensive industries in the United States are those that
manufacture aluminum, chemicals, forest products (such as paper and wood products), glass,
metalcasting, petroleum and coal products, and steel.112 Energy intensive industries with
high electricity consumption has also identified as potential locations for on-site generation
and combined heat and power systems based within the State. CCAT has identified 198
industrial facilities that, according to their standard industry classification (SIC) codes, are
involved in the manufacture of aluminum, chemicals, forest products, glass, metalcasting,
petroleum and coal products, or steel. There are currently no fuel cells installed at energy
111 EIA, CBECS: Table 14. Electricity Consumption and Expenditures for Non-Mall Buildings, 2003112 EIA; http://www.eia.doe.gov/emeu/mecs/iab/index5e.html
intensive industry sites that are included in these seven industry classifications in
Connecticut.113 (See Appendix B - Figure 1: Energy Intensive Industries)
If just five percent of the 198 energy intensive industry sites were powered by current fuel
cell technology, approximately 10 units could be deployed for a total capacity of between 2
and 2.5 MW.
Public Buildings: Municipal and State Government CCAT has identified 254 buildings that are public buildings, including 169 Town and City
Halls, and 85 selected state buildings. These potential locations represent opportunities for the
application of advanced energy technologies, including CHP and fuel cells. Policy directives
at the State level to increase the use of renewable energy and fuel cells at public buildings
may further accelerate the development and acceptance of these technologies. The application
of renewable and advanced technologies will also have unique value for active and passive
public education associated with the high public usage of the buildings and potential for
structured energy education at facility sites. There are currently no fuel cells installed at any
Town or City Hall in Connecticut. The Connecticut Juvenile Training School in Middletown,
Connecticut currently has six fuel cells installed at that facility.114 (See Appendix B - Figure
9: Town & City Halls, and Selected State Buildings)
If all of the 85 selected state buildings were powered by current fuel cell technology,
approximately 17 - 21 MWs of electricity could be generated. However, if just five percent of
the 169 City or Town Halls were powered by current fuel cell technology, approximately 8
units could be deployed for a total capacity of between 1.6 and 2 MW.
Telecommunications Facilities with Potential for Onsite Generation
There are approximately 1,475 wireless telecommunications sites in Connecticut.115 CCAT
has identified 59 wireless telecommunications sites owned or operated by the State of
Connecticut. These facilities represent opportunities to provide premium and uninterrupted
113 Connecticut Clean Energy Fund114 UTC Press Release March 20, 2002; http://www.utc.com/press/releases/2002-03-20.htm115 Connecticut Siting Council
power for continuous operation through the application of on-site generation including the
use of fuel cells. This application will have special value to provide increased reliability to
critical facilities associated with emergency communications and Homeland Security. There
is currently one fuel cell installed at a private telecommunications site in Enfield,
Connecticut.116 (See Appendix B - Figure 10: Telecommunications Sites)
Some of these state-owned and operated telecommunications facilities are located at a
building that may be classified as a public order and safety facility or a selected state
building. Consequently, to avoid double counting, if half of the 59 state-owned or operated
telecommunications sites were powered by current fuel cell technology, approximately 6 –
7.5 MWs of electricity could be generated.
Sewage Treatment Plants There are approximately 140 public and private sewage treatment plants in the State of
Connecticut.117 CCAT has identified 50 sewage treatment plants that have a design flow of
more than two million gallons per day. These potential locations represent favorable
opportunities for the application of uninterruptible power for necessary services such as water
supply, waste management, and the provision of public services. Some of these facilities have
the potential to use fuel cells with reformers that can utilize methane, produced as a by-
product of waste management. There is currently a fuel cell installed at each of the sewage
treatment plants in Fairfield and New Haven, Connecticut. (See Appendix B - Figure 8:
Sewage Treatment Plants)
If all of the 50 sewage treatment plants were powered by current fuel cell technology,
approximately 10 – 12.5 MWs of electricity could be generated.
It is not known at this time if the total capacity from these themes is sufficient to meet and/or
exceed the target production levels of the industry to achieve an improved economy of scale.
116 Connecticut Clean Energy Fund117 Connecticut Department of Environmental Protection
However, as a strategy going forward, these themes and potential sites can be prioritized and
refined as part of a final report and comprehensive plan for guidance.
Potential Hydrogen Applications
Alternative Fuel Station Location
As stated above, there are approximately 1,500 retail transportation fuel dealers in
Connecticut.118 However, very few of these provide fuel for alternative fueled vehicles. There
are approximately 31 public and private stations within the state that provide either
compressed natural gas, bio-diesel, propane, or electricity for alternative-fueled vehicles.119
In addition, the Connecticut Department of Transportation operates eight sites that provide
alternative fuels, including six sites that dispense bio-diesel and two sites that dispense E85 –
Ethanol.120 There are no public transportation fueling stations in Connecticut that provide
hydrogen for alternative fuel vehicles. (See Appendix B - Figure 11: Alternative Fuel Station
Locations)
State Fuel Dispensing Stations There are approximately 150 fuel dispensing stations operated by the State,121 including 70
operated by the Connecticut Department of Transportation.122 As stated previously, strategic
sites to make hydrogen available for vehicles crossing the state could be located near the
interstates. An analysis of state-owned fueling stations in Connecticut indicates that
approximately 85 of the state-owned fuel dispensing stations are located within two miles of
an interstate in Connecticut. (See Appendix B - Figure 12: State Fuel Dispensing Locations)
118 Connecticut Department of Consumer Protection, Food and Standards Division119 Alternative Fuels Data Center; http://www.eere.energy.gov/afdc/infrastructure/locator.html120 Connecticut Department of Transportation, Fuel Station Listing, 10/26/06121 Connecticut Department of Environmental Protection, Bureau of Materials Management and Compliance Assurance Emergency Response and Spill Prevention Division Site Assessment and Support Unit122 CASE Report - Preparing for the Hydrogen Economy: Transportation, June 2006, p. 34
Appendix B - Figure 1: Energy Intensive Industries
Appendix B - Figure 2: Food Service
Appendix B - Figure 3: Food Sales
Appendix B - Figure 4: Inpatient Healthcare
Appendix B - Figure 5: State Public Order and Safety
Appendix B - Figure 6: Lodging
Appendix B - Figure 7: Education
Appendix B - Figure 8: Sewage Treatment Plants
Appendix B - Figure 9: Town & City Halls, and Selected State Buildings
Appendix B - Figure 10: Telecommunications Sites
Appendix B - Figure 11: Alternative Fuel Station Locations
Appendix B - Figure 12: State Fuel Dispensing Locations
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Appendix C: Comparison of Fuel Cell Technologies
Appendix D: Acronyms
AC - Alternating Current
AFC - Alkaline Fuel Cell
ASME - American Society of Mechanical Engineers
CASE - Connecticut Academy of Science and Engineering
CCAT – Connecticut Center for Advanced Technology, Inc.
CCEF - Connecticut Clean Energy Fund
CGFCC - Connecticut Global Fuel Cell Center
CGS - Connecticut General Statutes
DECD - Department of Economic and Community Development
DEP - Connecticut Department of Environmental Protection
DMFC - Direct Methanol Fuel Cell
DPUC - Department of Public Utility Control
DOE - Department of Energy
DOT - Department of Transportation
EIA - Energy Information Administration
EPA - Environmental Protection Agency
FCV - Fuel Cell Vehicle
FMCC - Federally Mandated Congestion Charges
GHG - Greenhouse Gas
ISO-NE - ISO New England, Inc.
kWh - Kilowatt Hours
LHV - Lower Heating Value
MCFC - Molten Carbonate Fuel Cell
MEA - Membrane/Electrode Assembly
MW - Megawatts
NAAQS - National Ambient Air Quality Standards
OECD - Organization for Economic Cooperation and Development
PAFC - Phosphoric Acid Fuel Cell
PEM - Polymer Electrolyte Membrane / Proton Exchange Membrane
PEMFC - Polymer Electrolyte Membrane Fuel Cell
R&D - Research & Development
RGGI - Regional Greenhouse Gas Initiative
RPS - Renewable Portfolio Standards
SCR - Selective Catalytic Reduction
SOFC - Solid Oxide Fuel Cell
T&D - Transmission and Distribution
UConn - University of Connecticut
U.S. - United States
WADE - World Alliance for Decentralized Energy